−Removed: We are a blank check company incorporated on February 25, 2021, as a Cayman Islands exempted company, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).
−Removed: Our sponsor is SCS Sponsor III LLC, a Cayman Islands exempted limited liability company (our “Sponsor”).
−Removed: While we may pursue an initial Business Combination target in any industry, subsector therein or geographic location (subject to certain limitations), we intend to focus our search for a target business operating in the biotechnology industry and within the organ space subsector of such industry.
−Removed: The registration statements for our Initial Public Offering became effective on June 29, 2021 and June 30, 2021.
−Removed: On July 2, 2021, we consummated our Initial Public Offering of 25,000,000 Class A ordinary shares (the “public shares”), which includes a partial exercise by the underwriters of their over-allotment option in the amount of 3,000,000 public shares, at $10.00 per public share, generating gross proceeds of $250 million, and incurring offering costs of approximately $12.5 million, inclusive of approximately $7.7 million in deferred underwriting commissions.
−Removed: Substantially concurrently with the closing of the Initial Public Offering, we consummated the private placement (the “Private Placement”) of 640,000 Class A ordinary shares (each, a “private placement share” and collectively, the “private placement shares”), at a price of $10.00 per share to the Sponsor, generating gross proceeds of $6.4 million.
−Removed: Upon the closing of the Initial Public Offering and the Private Placement, $250.0 million ($10.00 per public share) of the net proceeds of the Initial Public Offering and certain of the proceeds of the Private Placement was placed in a trust account (the “Trust Account”) located in the United States and invested in U.S.
−Removed: government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less, or in a money market fund meeting certain conditions of Rule 2a-7
−Removed: of the Investment Company Act, as determined by us, until the earlier of:
−Removed: (i) the completion of our initial Business Combination and (ii) the distribution of the funds in the Trust Account as described below.
−Removed: Our management has broad discretion with respect to the specific application of the net proceeds of the Initial Public Offering and the sale of the private placement shares, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination.
−Removed: The Nasdaq listing rules require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
−Removed: We refer to this as the 80% of net assets test.
−Removed: If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain a valuation opinion from an independent investment banking firm that is a member of the Financial Industry Regulatory Authority, Inc.
−Removed: (“FINRA”), or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria.
−Removed: Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
−Removed: We intend to effectuate a Business Combination using the proceeds from the Initial Public Offering and Private Placement, and from additional issuances of, if any, our capital stock and our debt, or a combination of cash, stock and debt.
−Removed: We have not engaged in, and we will not engage in, any operations until we complete a Business Combination, and we have not generated any operating revenue to date.
−Removed: We will not generate any operating revenues until after completion of our initial Business Combination, at the earliest.
−Removed: Our entire activity since inception through December 31, 2021, related to our formation, matters related to our Initial Public Offering, and following the closing of the Initial Public Offering, matters related to an initial Business Combination.
−Removed: Based on our business activities, we are a “shell company” as defined under the Exchange Act of 1934, as amended (the “Exchange Act”).
−Removed: We will provide the holders of the public shares (the “public shareholders”) with the opportunity to redeem all or a portion of their public shares upon the completion of the Business Combination, either (i) in connection with a general meeting called to approve the Business Combination or (ii) by means of a tender offer.
−Removed: The decision as to whether we will seek shareholder approval of a Business Combination or conduct a tender offer will be made by us.
−Removed: The public shareholders will be entitled to redeem their shares for a pro rata portion of the amount held in the Trust Account, calculated as of two business days prior to the completion of a Business Combination, including any pro rata interest earned on the funds held in the Trust Account and not previously released to us to pay our tax obligations, subject to the limitations described herein.
−Removed: The per-share
−Removed: amount to be distributed to the public shareholders who redeem their shares will not be reduced by the deferred underwriting commissions we will pay to the underwriter.
−Removed: We will have until July 2, 2023 to consummate a Business Combination, which date may be extended pursuant to our Amended and Restated Memorandum and Articles of Association (such period, as it may be extended, the “Combination Period”).
−Removed: However, if we have not completed a Business Combination within the Combination Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the public shares, at a per-share
−Removed: price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable) divided by
−Removed: the number of then outstanding public shares, which redemption will completely extinguish the rights of the public shareholders as shareholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our Board of Directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
−Removed: In the event of a liquidation, the public shareholders will be entitled to receive a full pro rata interest in the Trust Account.
−Removed: Proposed ProKidney Business Combination
−Removed: On January 18, 2022, we entered into a Business Combination Agreement (the “ProKidney Business Combination Agreement”) with ProKidney LP, a limited partnership registered under the laws of Ireland (“ProKidney”), acting through its general partner ProKidney GP Limited, a private limited company incorporated under the laws of Ireland (“Legacy GP”).
−Removed: The ProKidney Business Combination Agreement provides that, among other things and upon the terms and subject to the conditions thereof, prior to or at the closing of the ProKidney Business Combination Agreement (the “Closing”), the following transactions will occur (together with the other transactions contemplated by the ProKidney Business Combination Agreement, the “ProKidney Business Combination”):
−Removed: (1) ProKidney will issue to us a number of common units of ProKidney (“Post-Combination ProKidney Common Units”) equal to the number of our fully diluted outstanding ordinary shares as of immediately prior to the Closing (but after giving effect to all redemptions of public shares and the purchase of Class A ordinary shares pursuant to one or more subscription agreements (the “PIPE Investment”)), in exchange for (a) (x) new Class B ordinary shares (“New ProKidney Class B ordinary shares”), which shares will have no economic rights but will entitle the holders thereof to vote on all matters on which our shareholders are entitled to vote generally, and (y) restricted stock rights in respect of New ProKidney Class B ordinary shares (“New ProKidney Class B PMEL RSRs”), which restricted stock rights shall convert into New ProKidney Class B ordinary shares upon the vesting of the associated restricted common unit of ProKidney, (b) an amount in cash equal to the aggregate proceeds we obtained in the PIPE Investment and (c) an amount in cash equal to the aggregate proceeds available for release to us from the Trust Account (after giving effect to all redemptions of public shares and after payment of any deferred underwriting commissions being held in the Trust Account and payment of certain transaction expenses);
−Removed: (2) Legacy GP will resign as the general partner of ProKidney and a private limited company incorporated under the laws of Ireland (“New GP”) will be admitted as the general partner of ProKidney;
−Removed: (3) ProKidney will distribute to the ProKidney unitholders the New ProKidney Class B ordinary shares and New ProKidney Class B PMEL RSRs received pursuant to clause (i)(a) (x) and (y) above;
−Removed: and (4) certain holders of ProKidney units will receive an aggregate of 17,500,000 restricted common units of ProKidney (“Earnout RCUs”) and 17,500,000 restricted stock rights of us (“Earnout RSRs” and, together with the Earnout RCUs, the “Earnout Rights”), which Earnout Rights will vest in three equal tranches upon the trading price of a Class A ordinary share reaching $15.00/share, $20.00/share and $25.00/share, respectively, on the terms set forth in the ProKidney Business Combination Agreement, or upon certain change of control events.
−Removed: When vested, the Earnout RCUs will automatically convert into Post-Combination ProKidney Common Units and the associated Earnout RSRs will automatically convert into New ProKidney Class B ordinary shares, respectively.
−Removed: On January 18, 2022, we entered into subscription agreements (the “Subscription Agreements”) with certain investors (“PIPE Investors”) pursuant to which the PIPE Investors have subscribed for an aggregate of 57,500,000 Class A ordinary shares for a price of $10.00 per share for an aggregate purchase price of $575,000,000, of which (1) $156,400,000 is committed by certain existing directors, officers and equityholders of, or investment funds managed by Suvretta Capital Management, LLC, us, our Sponsor and/or their respective affiliates participating in the PIPE Investment, and (2) at least $50,000,000 (which may, at the election of such investors, be increased to up to $100,000,000) is committed by certain existing directors, officers and unitholders of ProKidney and/or its affiliates participating in the PIPE Investment (the “ProKidney Related PIPE Investors”);
−Removed: provided that the ProKidney Related PIPE Investors may elect instead to purchase Post-Combination ProKidney Common Units, together with a corresponding number of Class B ordinary shares, in lieu of Class A ordinary shares.
−Removed: The Subscription Agreements are subject to certain conditions, including that there shall not be in force any injunction or order enjoining or prohibiting the issuance and sale of the shares under the Subscription Agreements;
−Removed: the terms of the ProKidney Business Combination Agreement shall not have been amended, and the minimum cash condition therein shall not have been waived, in a manner that is materially adverse to the investor party to the Subscription Agreement;
−Removed: and the representation and warranties of the parties to the Subscription Agreement shall be accurate (subject to agreed materiality thresholds).
−Removed: Following the Closing, the combined company will be organized in an umbrella partnership-C corporation (a so called “Up-C”)
−Removed: structure, and our direct assets will consist of ProKidney Common Units and equity interests of New GP, and substantially all of our operating assets and business will be held indirectly through ProKidney.
−Removed: The consummation of the proposed ProKidney Business Combination is subject to certain conditions as further described in the ProKidney Business Combination Agreement.
−Removed: For more information about the ProKidney Business Combination Agreement and the proposed ProKidney Business Combination, see our Current Report on Form 8-K
−Removed: filed with the SEC on January 18, 2022, as amended on January 21, 2022, and the ProKidney Disclosure Statement that we have filed with the SEC.
−Removed: Unless specifically stated, this Annual Report does not give effect to the proposed ProKidney Business Combination and does not contain the risks associated with the proposed ProKidney Business Combination.
−Removed: Such risks and effects relating to the proposed ProKidney Business Combination are included in the ProKidney Disclosure Statement.
−Removed: Our Acquisition and Value Creation Strategy
−Removed: We intend to leverage what we believe is a competitive advantage in sourcing potential targets that will materially benefit from our differentiated expertise and where we are best situated to augment the value of the business following the completion of our Business Combination.
−Removed: We believe our management team is well-positioned to identify different opportunities across the private biotechnology company landscape.
−Removed: Our selection process will leverage our relationships with leading biotechnology company founders, executives of private and public companies, venture capitalists and growth equity funds, in addition to the extensive industry and geographical reach of Social Capital and Suvretta’s platforms.
−Removed: Given our profile and approach, we anticipate that target business candidates may be brought to our attention from various sources, in particular founders of and investors in other private and public biotechnology companies in our networks.
−Removed: We also believe that our management team’s reputation, experience and track record of investing will make us a preferred partner for these potential targets.
−Removed: Our Acquisition Process
−Removed: Certain members of our management team are employed by either Social Capital or Suvretta or one of their respective affiliates.
−Removed: Social Capital and Suvretta are made aware of potential business opportunities from time to time, one or more of which we may desire to pursue, for a Business Combination.
−Removed: Our search for a Business Combination, ability to consummate a Business Combination, or the operations of a target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the coronavirus (“COVID-19”)
−Removed: pandemic and other events and the status of debt and equity markets.
−Removed: See “Item 1.A.
−Removed: Risk Factors — Risks Relating to Our Search for, and Consummation of or Inability to Consummate a Business Combination — Our search for a business combination, and any target business with which we ultimately consummate a business combination, may be materially adversely affected by the COVID-19
−Removed: pandemic and the status of debt and equity markets.”
−Removed: All of our officers and certain of our directors have fiduciary and contractual duties to either Social Capital or Suvretta and, as applicable, their underlying clients, and to certain companies in which either of them has invested or are otherwise affiliated with.
−Removed: These entities, including Social Capital Suvretta Holdings Corp.
−Removed: I (“DNAA”), Social Capital Suvretta Holdings Corp.
−Removed: II (“DNAB”) and Social Capital Suvretta Holdings Corp.
−Removed: IV (“DNAD” and, collectively with DNAA and DNAB, the “Other SCS SPACs”) and Social Capital Hedosophia Holdings Corp.
−Removed: IV (“IPOD”), Social Capital Hedosophia Holdings Corp.
−Removed: VI (“IPOF”), and which are described below under “— Additional Disclosers,” may compete with us for acquisition opportunities.
−Removed: If these entities decide to pursue any such opportunity, we may be precluded from pursuing such opportunities.
−Removed: Subject to his or her fiduciary duties under Cayman Islands law, none of the members of our management team who are also employed by our Sponsor or its affiliates have any obligation to present us with any opportunity for a potential Business Combination of which they become aware.
−Removed: Our Sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial business combinations, prior to us completing our initial Business Combination, and any such involvement may result in conflicts of interests as described herein.
−Removed: Members of our management team, in their capacities as directors, officers or employees of our Sponsor or its affiliates or in their other endeavors (including other special purpose acquisition companies they are or may become involved with), may choose to present potential business combinations to the related entities described above, current or future entities affiliated with or managed by our Sponsor, or third parties, before they present such opportunities to us, subject to his or her fiduciary duties under Cayman Islands law and any other applicable fiduciary duties.
−Removed: Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law:
−Removed: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us;
−Removed: and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
−Removed: For more information, see “Item 10.
−Removed: Directors, Executive Officer and Corporate Governance.”
−Removed: Our directors and officers presently have, and any or all of them in the future may have, additional, fiduciary or contractual obligations to other entities (including other special purpose acquisition companies they are or may become involved with) pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity.
−Removed: Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, subject to his or her fiduciary duties under Cayman Islands law.
−Removed: Our directors and officers are also not required to commit any specified amount of time to our affairs, including our management team who will be spending material business time on their other duties, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence.
−Removed: See “Item 1.A.
−Removed: Risk Factors — Risks Relating To Our Management Team and Conflicts of Interest — Certain of our directors and officers are now, and expect in the future to become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.”
−Removed: We do not believe, however, that the fiduciary duties or contractual obligations of our directors or officers will materially affect our ability to identify and pursue Business Combination opportunities (if we do not consummate the proposed ProKidney Business Combination) or complete our initial Business Combination, including the proposed ProKidney Business Combination.
−Removed: You should not rely on the historical record of our founders’ and management’s performance as indicative of our future performance.
−Removed: See “Item 1.A.
−Removed: Risk Factors — Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.”
−Removed: Additional Disclosures
−Removed: Certain of our directors and each of our officers are or have been involved with other special purpose acquisition companies.
−Removed: Below is a summary of those special purpose acquisition companies sponsored by affiliates of our sponsor.
−Removed: For additional information, see “Part III — Item 10.
−Removed: In February 2021, Chamath Palihapitiya and Kishan (a/k/a Kishen) Mehta founded our company and each of the Other SCS SPACs, each a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a business combination.
−Removed: Palihapitiya serves as the Chief Executive Officer and Chairman of the board of directors and Mr.
−Removed: Mehta serves as President and as a director of each of the SCS SPACs.
−Removed: Each of the Other SCS SPACs completed its initial public offering in July 2021, in which each sold 25,000,000 of its Class A ordinary shares, for an offering price of $10.00 per share, generating aggregate proceeds of $250,000,000 for such Other SCS SPACs.
−Removed: DNAA has not yet consummated a business combination;
−Removed: however, on January 26, 2022, DNAA announced that it had entered into a definitive agreement with Akili Interactive Labs, Inc.
−Removed: DNAA’s transaction with Akili is subject to approval of DNAA’s shareholders and other customary closing conditions.
−Removed: Neither DNAB nor DNAD has yet announced or consummated a business combination.
−Removed: While each of the Other SCS SPACs may pursue an initial business combination target in any industry, subsector therein or geographic location (subject to certain limitations), each intends to focus its search for a target business operating in the biotechnology industry.
−Removed: In July 2020, Mr.
−Removed: Palihapitiya, together with Ian Osborne, founded Social Capital Hedosophia Holdings Corp.
−Removed: V (“IPOE”), a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a business combination.
−Removed: Palihapitiya served as the Chief Executive Officer and Chairman of the board of directors of IPOE.
−Removed: IPOE completed its initial public offering in October 2020, in which it sold 80,500,000 units, each consisting of one IPOE Class A ordinary share and one-fourth
−Removed: of one redeemable warrant for one IPOE Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $805,000,000.
−Removed: In May 2021, IPOE consummated a merger with Social Finance, Inc.
−Removed: (“SoFi”), which operates a financial services platform.
−Removed: SoFi’s common stock currently trades on The Nasdaq Global Select Market under the symbol “SOFI”.
−Removed: Additionally, in July 2020, Mr.
−Removed: Palihapitiya, together with Mr.
−Removed: Osborne, founded IPOD and IPOF, each a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting a business combination.
−Removed: Palihapitiya serves as the Chief Executive Officer and Chairman of the board of directors of each of IPOD and IPOF.
−Removed: IPOD completed its initial public offering in October 2020, in which it sold 46,000,000 units, each consisting of one IPOD Class A ordinary share and one-fourth
−Removed: of one redeemable warrant for one IPOD Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $460,000,000.
−Removed: IPOF completed its initial public offering in October 2020, in which it sold 115,000,000 units, each consisting of one IPOF Class A ordinary share and one-fourth
−Removed: of one redeemable warrant for one IPOF Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $1,150,000,000.
−Removed: Neither IPOD nor IPOF has yet announced or consummated a business combination.
−Removed: While IPOD and IPOF may each pursue an initial business combination target in any industry or geographic location (subject to certain limitations), each intends to focus its search for a target business operating in the technology industries.
−Removed: In October 2019, Mr.
−Removed: Palihapitiya, together with Mr.
−Removed: Osborne, founded Social Capital Hedosophia Holdings Corp.
−Removed: III (“IPOC”), a blank check company incorporated for the purposes of effecting a business combination.
−Removed: Palihapitiya served as the Chief Executive Officer and Chairman of the board of directors of IPOC.
−Removed: IPOC completed its initial public offering in April 2020, in which it sold 82,800,000 units, each consisting of one IPOC Class A ordinary share and one-third
−Removed: of one redeemable warrant for one IPOC Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $828,000,000.
−Removed: In January 2021, IPOC consummated a merger with Clover Health Investments, Corp.
−Removed: (“Clover Health”), which operates next-generation Medicare Advantage plans.
−Removed: Clover Health’s common stock currently trades on The Nasdaq Global Select Market under the symbol “CLOV”.
−Removed: In October 2019, Mr.
−Removed: Palihapitiya, together with Mr.
−Removed: Osborne, founded Social Capital Hedosophia Holdings Corp.
−Removed: II (“IPOB”), a blank check company incorporated for the purposes of effecting a business combination.
−Removed: Palihapitiya served as the Chief Executive Officer and Chairman of the board of directors of IPOB.
−Removed: IPOB completed its initial public offering in April 2020, in which it sold 41,400,000 units, each consisting of one IPOB Class A ordinary share and one-third
−Removed: of one redeemable warrant for one IPOB Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $414,000,000.
−Removed: In December 2020, IPOB consummated a merger with Opendoor Technologies Inc.
−Removed: (“Opendoor”), a leading digital platform for residential real estate.
−Removed: Opendoor’s common stock currently trades on The Nasdaq Global Select Market under the symbol “OPEN”.
−Removed: In May 2017, our founders, Chamath Palihapitiya, together with Ian Osborne, founded Social Capital Hedosophia Holdings Corp.
−Removed: (“IPOA”), a blank check company incorporated for the purposes of effecting a business combination.
−Removed: Palihapitiya served as the Chief Executive Officer and Chairman of the board of directors, Mr.
−Removed: Osborne served as President and as a director of IPOA.
−Removed: IPOA completed its initial public offering in September 2017, in which it sold 69,000,000 units, each consisting of one IPOA Class A ordinary share and one-third
−Removed: of one redeemable warrant for one IPOA Class A ordinary share, for an offering price of $10.00 per unit, generating aggregate proceeds of $690,000,000.
−Removed: In October 2019, IPOA consummated a merger with Virgin Galactic, a vertically-integrated aerospace company pioneering human spaceflight for private individuals and researchers.
−Removed: Virgin Galactic’s common stock currently trades on NYSE under the symbol “SPCE”.
−Removed: Initial Business Combination
−Removed: The Nasdaq listing rules require that we complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the trust account (excluding deferred underwriting commissions and taxes payable on the interest earned on the trust account) at the time of our signing a definitive agreement in connection with our initial business combination.
−Removed: We refer to this as the 80% of net assets test.
−Removed: The fair market value of the target or targets will be determined by our board of directors based upon one or more standards generally accepted by the financial community, such as discounted cash flow valuation or value of comparable businesses.
−Removed: If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain a valuation opinion from an independent investment banking firm that is a member of FINRA, or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria.
−Removed: Additionally, pursuant to Nasdaq rules, any initial business combination must be approved by a majority of our independent directors.
−Removed: We will only complete our initial Business Combination if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for it not to be required to register as an investment company under the Investment Company Act.
−Removed: Even if the post-transaction company owns or acquires 50% or more of the voting securities of the target, our shareholders prior to our initial Business Combination may collectively own a minority interest in the post-transaction company, depending on valuations ascribed to the target and us in our initial Business Combination transaction.
−Removed: For example, we could pursue a transaction in which we issue a substantial number of new shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial Business Combination.
−Removed: In this case, we would acquire a 100% controlling interest in the target.
−Removed: However, as a result of the issuance of a substantial number of new shares, our shareholders immediately prior to our initial Business Combination could own less than a majority of our issued and outstanding shares subsequent to our initial Business Combination.
−Removed: If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% of net assets test.
−Removed: If our initial Business Combination involves more than one target business, the 80% of net assets test will be based on the aggregate value of all of the target businesses.
−Removed: Notwithstanding the foregoing, if we are not then listed on Nasdaq for whatever reason, we would no longer be required to meet the foregoing 80% of net assets test.
−Removed: We have encountered, and expect to continue to encounter, intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies (including potentially from the Other SCS SPACs, each of which is focused on pursuing an initial business combination with a target operating in the biotechnology industry) and other entities, domestic and international, competing for the types of businesses we intend to acquire.
−Removed: Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
−Removed: Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
−Removed: Additionally, the number of blank check companies looking for business combination targets has increased compared to recent years and many of these blank check companies are sponsored by entities or persons that have significant experience with completing business combinations.
−Removed: While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of the private placement shares, if the proposed ProKidney Business Combination is not consummated, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
−Removed: This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
−Removed: Furthermore, in the event we seek shareholder approval of our initial Business Combination and we are obligated to pay cash for our Class A ordinary shares, it will potentially reduce the resources available to us for our initial Business Combination.
−Removed: Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination.
−Removed: If we have not completed our initial Business Combination within the Combination Period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
+Added: Prior to July 11, 2022, we were a blank check company registered under the laws of the Cayman Islands and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.
+Added: On July 11, 2022, we completed the Business Combination pursuant to the Business Combination Agreement dated January 18, 2022, that we entered into with PKLP.
+Added: Upon the completion of the Business Combination, we changed our name to “ProKidney Corp.”
+Added: and the business of PKLP became our business.
+Added: We are a clinical-stage biotechnology company with a transformative proprietary cell therapy platform capable of treating multiple chronic kidney diseases using a patient’s own cells isolated from the patient intended for treatment.
+Added: Our approach seeks to redefine the treatment of chronic kidney disease (“CKD”), shifting the emphasis away from management of kidney failure to the restoration or improvement of kidney function to stop or delay progression of CKD.
+Added: Our lead product candidate, which we refer to as REACT®, is designed to preserve kidney function in a CKD patient’s diseased kidneys.
+Added: REACT is a product that includes autologous Selected Renal Cells (“SRCs”) prepared from a patient’s own (autologous) kidney cells.
+Added: SRCs are formulated into a product for reinjection into the patient’s kidney using a minimally invasive outpatient procedure that might be repeatable, if necessary.
+Added: Because REACT is a personalized treatment composed of cells prepared from a patient’s own kidney, there is no need for treatment with immunosuppressive therapies that are required during a patient’s lifetime when a patient receives a kidney transplant from another (allogeneic) donor.
+Added: Currently available therapies have limited ability to address the root causes of diabetic CKD, and patients continue to decline in kidney function even after receiving standard of care therapy.
+Added: We are currently conducting a global Phase 3 development program and multiple Phase 2 clinical trials for REACT in subjects with moderate to severe diabetic kidney disease.
+Added: We are also conducting a Phase 1 clinical trial for REACT in subjects with congenital anomalies of the kidney and urinary tract (“CAKUT”) for which the last subject visit occurred in January 2023.
+Added: REACT has been generally well tolerated by subjects with moderate to severe diabetic kidney disease in Phase 1 and 2 clinical testing to date.
+Added: It has also been shown, based on measurements of iohexol renal clearance, to preserve kidney function in some study subjects.
+Added: REACT has received Regenerative Medicine Advanced Therapy (“RMAT”) designation from the FDA.
+Added: Our patented technology includes multiple breakthroughs in the manufacturing and medical delivery of cellular therapy products.
+Added: While it has long been accepted that the body contains cells with regenerative power, our technology enables the preparation of key progenitor cells, or SRCs, made by expanding a patient’s own kidney cells, that can be reinjected into the same patient in an attempt to restore kidney function lost due to chronic diseases.
+Added: Our process begins when a small biopsy of a patient’s diseased kidney is sent to our current good manufacturing practices (“cGMP”) manufacturing facility.
+Added: We are able to process cells taken from the biopsy and select specific cells with a regenerative capacity.
+Added: These selected renal cells, SRCs, are formulated into a personalized product for reinjection into the damaged kidney(s).
+Added: To date, clinical studies suggest that REACT has the capacity to, for a time, positively impact kidney function as reflected by stabilizing the estimated glomerular filtration rate (“eGFR”) or attenuating the rate of eGFR decline in patients with type 2 diabetic CKD.
+Added: Other improvements observed with REACT treatment include increased kidney cortical thickness and improved hemoglobin levels;
+Added: reduced hemoglobin levels are a marker of anemia.
+Added: We are initially pursuing the development of REACT for use in moderate to severe CKD patients in the United States with diabetes as the primary cause and may include hypertension as a potential label expansion indication.
+Added: We estimate that approximately 38-39 million adults, representing approximately 15% of the U.S.
+Added: adult population, currently suffer from CKD.
+Added: Chronic Kidney Disease is segmented into five CKD stages, from mild (CKD 1) to severe (CKD5 or kidney failure).
+Added: With respect to those patients with stage 3 and 4 CKD caused primarily by diabetes, we estimate that approximately 4-5 million patients could be eligible to be treated with REACT.
+Added: We currently operate a manufacturing facility that has been designed to comply with FDA and European Medicines Agency (“EMA”) quality standards and to produce REACT treatments from biopsied material.
+Added: This facility, based in Winston-Salem, North Carolina, in the United States, has a potential capacity sufficient to supply our global Phase 3 program as well as the first stage of a potential commercial launch, should REACT ever receive regulatory approval.
+Added: We are leveraging our cell therapy technology to develop product candidates designed to stop or delay kidney failure in CKD from diabetes and CAKUT.
+Added: The following table summarizes our current pipeline:
+Added: The Renal Autologous Cell Therapy (REACT) injection is an investigational therapy that is a mixture of kidney cells prepared from the participant’s own kidney tissue.
+Added: The initial kidney tissue is obtained from two small pieces of kidney tissue obtained by a standard kidney biopsy performed by a specially trained physician.
+Added: From this tissue, certain kidney cells, which are thought to be important for healing the kidney, are grown and multiplied in a highly specialized laboratory facility.
+Added: After several weeks, when sufficient cells are available, the REACT preparation of cells is sent back to the clinical trial site where it can be re-injected directly into the participant’s own kidneys.
+Added: It is believed that these selected and prepared cells may help a diseased kidney stabilize or improve over time, and thereby potentially delay the need for dialysis or transplantation by preserving kidney function.
+Added: Clinical studies suggest that REACT can impact kidney function positively by stabilizing eGFR, or attenuating the rate of eGFR decline, in type 2 diabetic CKD patients.
+Added: We have developed a cryopreserved version of REACT that allows for long-term product preservation to be used in our Phase 3 trials of REACT (called REGEN-006 and REGEN-016), our Phase 2 trial of REACT (called REGEN-007) and our Phase 1 trial of REACT (called REGEN-015), treating diabetes patients with CKD.
+Added: In addition to the cryopreserved formulation of REACT, we used a gelatin-based hydrogel formulation in our Phase 2 trials (called RMCL-002 and REGEN-003) and Phase 1 trial in congenital anomalies of the kidney and urinary tract (“CAKUT”) (called REGEN-004).
+Added: The cryopreserved version of REACT allows for preparation of 5-10 doses from a single biopsy sample.
+Added: We have two preclinical programs (called REACT/Gen and REACT/Universal) where we plan to use genetically modified bioactive kidney cell populations to provide regenerative effects to a diseased kidney.
+Added: The preclinical programs seek to obtain “universal donor”
+Added: cell populations where gene editing is used to generate novel kidney cell populations that do not generate an immune response.
+Added: Our Team and Corporate History
+Added: We have an experienced internal research and development team focused on utilizing our deep understanding of kidney disease pathways to discover and develop novel cell-based therapies with a multi-modal mechanism targeting various pathways.
+Added: Since our founding, we have expanded our team to incorporate additional expertise as needed to pursue our goal of becoming a fully integrated biopharmaceutical company.
+Added: We have assembled key management team members with expertise in kidney disease, cell therapy, development, regulatory affairs, medical affairs, operations, quality, and manufacturing.
+Added: Our Chief Executive Officer, Tim Bertram, has more than 38 years of pharmaceutical development expertise and has led innovations in cellular therapeutics for over 18 years.
+Added: Our Chief Operating Officer, Deepak Jain, Ph.D., has over 36 years of experience in the development of biologics, tissue engineered and cell therapy products.
+Added: Our Chief Legal Officer and Corporate Secretary, Todd Girolamo, has more than 30 years’
+Added: experience in legal practice and public finance, including 12 years in cell therapy development and 12 years as a series 24, 7 and 63 licensed principal specializing in equity research, sales, and trading of biotechnology, pharmaceuticals and medical technology market sectors.
+Added: Chief Financial Officer James Coulston has 15 years of biotech financial management experience.
+Added: Our technology is being developed based on work that has been conducted for the past 20 years at different institutions.
+Added: Founder and CEO Tim Bertram noted when he was working on kidney disease therapies that healthy, young patients suffering from acute kidney injury demonstrated the ability to rejuvenate and repair their injured kidneys, while patients with chronic, diabetic CKD demonstrated continued decline in kidney function.
+Added: Intrigued by this, Dr.
+Added: Bertram and his team endeavored to isolate the cell types occurring naturally in the kidney that are responsible for repair of kidney function.
+Added: This work continued through various institutions to become REACT at ProKidney today.
+Added: ProKidney LLC, formerly, a wholly owned subsidiary of PKLP (“ProKidney Bermuda”) was formed in December 2018 as a Bermuda limited liability company and was founded by a group of investors in the pharmaceutical industry.
+Added: ProKidney (formerly known as RegenMed (Cayman) Ltd.
+Added: (d/b/a inRegen)) (“ProKidney-KY”) was duly incorporated under the Companies Act (as amended) of the Cayman Islands (the “Cayman Islands Companies Act”) on December 21, 2015, as an exempted company.
+Added: In 2020, ProKidney-KY’s name was changed from RegenMed (Cayman) Ltd.
+Added: to ProKidney.
+Added: ProKidney, LLC (formerly known as Twin City Bio LLC) (“ProKidney-US”) changed its name from Twin City Bio LLC to ProKidney, LLC.
+Added: ProKidney-US is a Delaware limited liability company formed on December 18, 2015.
+Added: In January 2019, ProKidney Bermuda acquired all of the equity interests in ProKidney-KY and ProKidney-US.
+Added: ProKidney Bermuda acquired the equity interests in ProKidney-KY to develop its renal advanced cell therapy, which has the potential to preserve kidney function in patients with chronic kidney disease or delay or eliminate the need for dialysis and organ transplantation.
+Added: ProKidney Bermuda acquired ProKidney-US to provide contractual development and manufacturing services to ProKidney-KY, which is ProKidney-US’s only customer.
+Added: On August 5, 2021, PKLP was organized as a limited partnership under the Limited Partnerships Act, 1907 of Ireland (the “Irish LP Act”), and, as applicable, the Partnership Act 1890, of Ireland, with ProKidney Bermuda becoming a wholly owned subsidiary of PKLP.
+Added: In September 2021, ProKidney Bermuda distributed its equity interests in ProKidney-KY and ProKidney-US
+Added: to PKLP with the effect that ProKidney-KY and ProKidney-US became direct wholly-owned subsidiaries of PKLP.
+Added: Bermuda was dissolved in October of 2022.
+Added: References to “ProKidney”
+Added: or the “Company”
+Added: generally refer to PKLP after its reorganization and to ProKidney Corp.
+Added: following the Closing.
+Added: Our goal is to become a fully integrated biopharmaceutical company pioneering treatments for CKD.
+Added: Key components of our business strategy include the following:
+Added: Obtain regulatory approval for, and successfully commercialize REACT, initially as a treatment for patients with chronic kidney disease caused by diabetes.
+Added: We intend to continue to pursue the clinical development of REACT through a world-wide Phase 3 clinical development program that has been reviewed by both the EMA and the FDA.
+Added: We activated the first site for our first Phase 3 clinical trial, REGEN-006 (which we also call “proact 1”), in the fourth quarter of 2021 with the first Informed Consent Form signed and the first subject randomized into the trial in the first quarter of 2022.
+Added: Our second Phase 3 trial, REGEN-016 (which we also call “proact 2”), received regulatory allowance to begin enrollment of patients in Spain during the first quarter of 2023, with additional country allowances and site activations expected throughout 2023.
+Added: Enrollment for REGEN-016 is anticipated to begin in the second quarter of 2023.
+Added: A long-term follow-up trial, REGEN-008, is expected to launch in late 2023, for subjects who received REACT as part of our trials.
+Added: Expand the clinical development of REACT for the treatment of additional indications, including CKD caused by Congenital Anomalies of the Kidney and Urinary Tract and hypertension.
+Added: CAKUT is the cause of more than 50% of pediatric cases of kidney failure, with long-term complications of CKD which may progress into adulthood.
+Added: REGEN-004 was a Phase 1 clinical trial that was designed to assess in five patients the ability of REACT to prevent, stop, or delay the negative effects of CAKUT.
+Added: We completed the last visit for the last patient in January 2023 and expect to have a clinical study report by the end of the third quarter of 2023.
+Added: Hypertension related CKD is the second most common cause of CKD in adults.
+Added: Future trials may address CKD in CAKUT and hypertensive populations.
+Added: Discover and develop additional product candidates for the treatment of kidney diseases utilizing our cell therapy approach.
+Added: Our team has extensive experience in discovery research, deep expertise in kidney disease and a strong record of publication in high-impact peer reviewed journals.
+Added: While executing on its primary mission to develop and commercialize REACT our team will investigate additional disease pathways associated with kidney disease, identify key targets for intervention and generate product candidates against these targets.
+Added: We may also in-license from or collaborate with third parties to develop product candidates that we, based on our understanding of kidney diseases and pathways, believe are promising therapeutics.
+Added: Maintain and continually refine our sophisticated internal expertise in manufacturing our products .
+Added: We have developed and built a cGMP manufacturing facility in which we manufacture REACT for clinical trials and intend to continue to develop for purposes of the eventual commercial manufacturing process, assuming receipt of necessary regulatory approvals.
+Added: Our current cGMP manufacturing facility is capable of manufacturing product for our Phase 3 clinical trials and could serve as our commercial launch facility.
+Added: We anticipate construction of automated manufacturing facilities to meet demand for REACT upon commercialization.
+Added: Kidney Disease Overview
+Added: CKD is highly prevalent in the United States and European Union.
+Added: Based on available U.S.
+Added: data from the 2018 National Health and Nutritional Examination Survey, we expect the aggregate CKD population in the United States and European Union to reach approximately 74.4 million in 2020, approximately 82.2 million in 2030 and approximately 90.9 million in 2040.
+Added: The most common causes of CKD among adults are diabetes, hypertension, and glomerular disease, and in the pediatric population, CAKUT.
+Added: In the United States, it is believed that approximately 18 million patients per year suffer from stage 3 or 4 CKD.
+Added: Our Approach:
+Added: Working to Restore Kidney Function through Autologous Cell Therapy
+Added: Autologous cell therapy refers to the prevention or treatment of human disease by the administration of a person’s own cells that have been selected, multiplied and formulated for delivery outside the body.
+Added: We believe that our technology has the potential to restore kidney function by using a patient’s own SRCs to restore natural healing processes.
+Added: By contrast, organ transplantation from other donors, or allogeneic transplants, can be associated with surgical complications, organ rejection and failure.
+Added: Further, organ transplantation patients live with the adverse effects of immunosuppressive therapies and ongoing therapeutic maintenance that are required in order to reduce the risk of rejection of transplanted organs.
+Added: Preparing the personalized renal autologous cell therapy (REACT) begins when a small biopsy of the diseased kidney is sent to our laboratory.
+Added: We are able to identify the patient’s own healthy progenitor cells and formulate them into a personalized product that can be re-injected into the damaged kidney for repair and restoration of function.
+Added: Due to one severe bleed that occurred during an early REACT injection procedure, we changed to a noncutting needle design for the REACT procedure.
+Added: Based on preclinical studies, when the manufactured REACT product is injected into the diseased kidney, the product’s progenitor cells rapidly distribute throughout the kidney and integrate into the damaged nephrons and interstitium.
+Added: To date, clinical studies suggest that treatment with REACT in patients with type 2 diabetes and CKD may positively impact kidney function by stabilizing eGFR or attenuating the rate of eGFR decline.
+Added: Other improvements observed with preclinical and clinical REACT treatment include metabolic, as well as filtration benefits, stabilization and/or reduction in UACR, increased kidney cortical thickness, and improved hemoglobin levels, improvements in calcium phosphate and vitamin D3.
+Added: REACT is an autologous homologous cell admixture made from expanded autologous SRCs, obtained from each individual subject’s kidney biopsy tissue.
+Added: To manufacture REACT, biopsy tissue from each enrolled subject is sent to ProKidney’s facilities where the kidney cells are expanded and SRCs selected.
+Added: SRCs are formulated into a cryopreserved product at a concentration of approximately 100 x 106 cells/mL and shipped frozen to the clinical site.
+Added: Mechanism of Action of REACT
+Added: Engraftment of SRCs is believed to provide the molecular and mechanistic basis for activation of endogenous renal repair mechanisms that are still active in the chronically diseased kidney.
+Added: Non-clinical studies in multiple animal models of CKD have demonstrated that SRCs injected directly into the kidney cortex were capable of effecting a regenerative response in multiple locations of the nephron through direct engraftment or tissue replacement and through a putative paracrine mechanism involving the effect of secreted factors.
+Added: In animal models of CKD, treatment with SRCs preserved kidney function, reduced proteinuria and provided a significant survival benefit.
+Added: Additionally, there is evidence both from preclinical models and early findings from clinical studies that demonstrate that injected SRCs may augment other important kidney functions related to bone and mineral metabolism and hematopoiesis.
+Added: Observations supporting this include trends toward decreasing phosphorus and increasing hemoglobin levels.
+Added: In animal models of CKD, SRCs have been shown to minimize the development of osteoclastic bone resorption, which is characteristically due to secondary hyperparathyroidism, and improve cellularity in marrow related to red blood cell production.
+Added: Our Product Candidates
+Added: REACT is currently in a Phase 3 development program, as well as ongoing Phase 2 clinical trials, for the treatment of moderate to severe diabetic kidney disease and a Phase 1 clinical trial for REACT in patients with CAKUT.
+Added: These trials are being, or will be conducted, at over 150 clinical sites throughout the United States, Europe, Asia and Latin America.
+Added: REACT has been generally well tolerated in clinical trials to date involving patients with moderate to severe diabetic kidney disease.
+Added: For example, in the RMCL-002 Phase 2 clinical trial, the interim analysis as of September 2021 demonstrates there is a statistically significant improvement in a measurement of kidney function, referred to as eGFR, between treatment arms in the trial, measured at six months after the second injection of REACT (p-value=0.03), nine months after the second injection of REACT (p-value=0.018), and 12 months after the second injection of REACT (p-value=0.02).
+Added: The ongoing clinical development program utilizes a percutaneous injection method into the kidney that is conducted using conscious sedation in an outpatient same-day procedure.
+Added: As of December 31, 2022, over 200 patients were enrolled in our clinical trials and had received a first injection of REACT with more than 120 patients having received a second injection.
+Added: The procedure appears to be generally well tolerated with the most commonly observed procedure related events including nausea, vomiting, fever, and hematuria with biopsy.
+Added: In the RMCL-002 trial, which used a different formulation of the REACT product and a different procedure than that presently used in our Phase 3 trials, one participant experienced serious adverse events that included scarring or fibrosis and a decrease in kidney function.
+Added: A second participant experienced decreased kidney blood flow observed on contrast-enhanced computerized tomography (“CT”) imaging and a decrease in kidney function.
+Added: Serious adverse events, including injection-related pain, kidney-related events such as hematoma, renal vascular events, eGFR decline and acute kidney injury, have also been reported.
+Added: Other serious adverse events, including acute myocardial infarction, acute respiratory failure, end stage renal disease, and coronary artery disease have been reported and are generally associated with the co-morbidities of patients with Type 2 diabetes.
+Added: We cannot assure that the improvements in eGFR that we have observed in the March 2022 interim analysis of our RMCL-002 Phase 2 clinical trial will be observed in any future clinical trials.
+Added: Likewise, promising results in interim analyses or other preliminary analyses may not ensure that the clinical trial as a whole will be successful.
+Added: Background and Unmet Need
+Added: Chronic Kidney Disease (CKD)
+Added: CKD is characterized by progressive disease that, without therapeutic intervention, will worsen until the subject reaches end-stage renal disease (“ESRD”).
+Added: CKD patients suffer from reduced kidney function, demonstrated by decreased eGFR, or evidence of kidney damage, such as increased excretion of urinary albumin as shown in physician office laboratory testing.
+Added: The global prevalence of CKD is estimated at 10% with ranges of 8-16% in various high populations.
+Added: CKD is associated with considerable morbidity, such as diabetes mellitus, and is often accompanied by adverse outcomes due to underlying disease states and/or risk factors such as renovascular disease, hypertension and diabetes, causing an increased risk of mortality.
+Added: Ninety-seven percent of patients with moderate to severe CKD have asymptomatic disease, but even this stage of CKD is associated with a two-to four-fold rise in cardiovascular disease risk, along with a significant increase in all-cause mortality.
+Added: Only a small proportion of CKD patients progress to ESRD (i.e., Stage 5 disease), but the increasing life expectancy of humans has led to growing numbers of patients with chronic diseases and end-stage organ failure.
+Added: Even with costly treatments, subjects with ESRD experience substantial morbidity and mortality.
+Added: To survive, ESRD subjects require renal replacement therapy with peritoneal dialysis, hemodialysis or kidney transplantation.
+Added: Preventing or delaying the onset of adverse outcomes of CKD via early intervention is the primary strategy for CKD management.
+Added: Nevertheless, early treatments have been less than optimal, resulting in a significant unmet medical need for improved interventional strategies to manage CKD and delay the regression to ESRD.
+Added: The major causes of CKD in adults are diabetes and hypertension.
+Added: Nearly half of all CKD cases arise from diabetes, with or without hypertension.
+Added: The incidence of CKD continues to increase, primarily due to the increased worldwide incidence of type 2 diabetes and metabolic syndrome.
+Added: Staging and grading of kidney function are most often quantified by estimated glomerular filtration rate (or eGFR), which is defined as the volume of plasma from which a given substance is completely cleared by glomerular filtration per unit time.
+Added: KDIGO 2012 Clinical Practice Guideline for the Evaluation and Management of Chronic Kidney Disease provided guidelines intended to aid general practitioners and nephrologists in the evaluation, classification, and management of CKD in both adults and children.
+Added: As set forth below, Figure 1 categorizes the risk of ESRD from “low”
+Added: to “very high”
+Added: based on both eGFR measurements, ranging from >90 mL/min/1.73m2 to <30 mL/min/1.73m2, and albuminuria classifications ranging from <30 mg/g to >300 mg/g.
+Added: When the kidneys cease to function entirely, which constitutes ESRD, renal replacement therapy in the form of dialysis or transplantation is generally required.
+Added: Summary of Classification Estimates for CKD
+Added: All-cause mortality rates were shown to increase progressively as GFR declined.
+Added: Populations defined as having an eGFR <60 mL/min/1.73m2 consistently exhibited a higher mortality rate than comparator groups where there was no evidence of CKD.
+Added: Treatment of patients with CKD is focused on slowing progression and preparing for kidney failure or replacement.
+Added: For many patients, CKD occurs as part of a complex comorbidity cluster including cardiovascular disease and type 2 diabetes.
+Added: Increased risk of cardiovascular disease can be a complication of CKD or an independent comorbidity associated with type 2 diabetes.
+Added: The goals in the treatment of CKD are to lower cardiovascular risk and prevent or slow the progression of kidney failure
+Added: via administration of angiotensin converting enzyme inhibitors and/or angiotensin receptor blockers to decrease proteinuria and control hypertension, insulin and anti-diabetic agents for glycemic control (e.g., reduced serum hemoglobin A1c), and statin therapy to counter dyslipidemia.
+Added: When a patient reaches ESRD, renal replacement therapy in the form of kidney dialysis or transplantation is generally required.
+Added: The vast majority of Stage 5 CKD patients in the United States and certain other developed countries receive hemodialysis.
+Added: Dialysis replaces about 5-15% of kidney function, depending on the intensity and frequency of use;
+Added: dialysis also helps to restore fluid and electrolyte balance when kidneys fail.
+Added: However, the life expectancy of an ESRD patient initiating hemodialysis is < 10 years.
+Added: Additionally, hemodialysis has been associated with multiple, serious complications as well as interference with quality of life, due to the need for frequent dialysis and vascular access maintenance.
+Added: Although kidney transplantation remains the most effective form of therapy for CKD currently, there is a chronic shortage of organs.
+Added: If a patient can secure a kidney for transplantation, long-term immunosuppressive therapy is required to prevent rejection.
+Added: Use of these regimens results in a higher incidence of infection and, over the long term, some types of cancer.
+Added: And while xenotransplantation might be a promising alternative approach in the future to bridge the gap between the supply and demand of human organs, tissues, and cells, immunological barriers are limiting factors in clinical xenotransplantation at the current time.
+Added: While patients continue to lose kidney function on existing therapies, the cost of CKD treatment is high and the rates of CKD and ESRD, along with the associated expenditures, are expected to continue to rise.
+Added: As a major source of healthcare expenditure in the United States, the Medicare spend on beneficiaries with CKD is approximately $80 billion.
+Added: Medicare spend on beneficiaries with ESRD can reach an additional $50 billion, with an estimated $93,000 Medicare annual cost per patient for dialysis.
+Added: Additionally, the estimated ESRD cost per patient with commercial insurance, assuming a five-year dialysis period, is up to $2 million.
+Added: Based on ProKidney management estimates and analysis
+Added: Clinical Development
+Added: Our completed clinical trials and currently ongoing clinical trials of REACT are summarized below;
+Added: the name of the product candidate tested in the trials was changed from Neo-Kidney Augment (“NKA”) to REACT after completion of some of the trials.
+Added: The summary below also includes interim results which are based on a preliminary analysis of then- available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular trial.
+Added: In particular, we have announced interim results from our ongoing RMCL-002 Phase 2 clinical trial.
+Added: We expect that final results from our completed REGEN-003 Phase 2 clinical trial and REGEN-004 Phase 1 clinical trial will be available in late 2023.
+Added: We also plan to evaluate interim results from our ongoing REGEN-006 Phase 3 clinical trial in early 2025 and REGEN-016 Phase 3 clinical trial in late 2025.
+Added: Interim results from clinical trials that we may complete are not necessarily indicative of
+Added: results from future data and are subject to the risk that one or more of the clinical outcomes may materially change as patient enrollment continues and more patient data become available.
+Added: Preliminary or topline results also remain subject to audit and verification procedures that may result in the final data being materially different from the preliminary data we previously published.
+Added: As a result, interim and preliminary data should be viewed with caution until the final data are available.
+Added: Diabetic Kidney Disease (DKD)
+Added: Phase 1 Clinical Development (TNG-CL010 and TNG-CL011)
+Added: TNG-CL010 was an open-label safety and delivery optimization study of REACT (formerly known as NKA) in subjects with CKD conducted in Sweden.TNG-CL010 commenced in April 2013 and completed in December 2014.
+Added: TNG-CL011 was also an open-label safety and delivery optimization study of REACT in subjects with type 2 diabetes and CKD conducted in the United States.
+Added: TNG-CL011 commenced with first subject enrolled in February 2014 and completed in December 2014.
+Added: The primary objective of these trials was to assess the safety and delivery of REACT injected into one kidney.
+Added: Six subjects from Sweden (TNG-CL010) and one from the United States with Diabetes Type 2 CKD, ranging in age from 53-70 years, eGFR levels between 19-34 (average 25 +/- 2, Cystatin C) and iohexol clearance of 15-39, average 26 +/- 3, were enrolled.
+Added: One subject with Type 2 DKD was enrolled in TNG-CL011.
+Added: The results from the Phase 1 trials indicated that REACT was well tolerated when administered to the kidney, with no adverse events from the autologous SRCs.
+Added: When the decline of kidney function pre-and post- injection were compared, the subjects receiving REACT in this Phase 1 trial had an imputed delay in dialysis of approximately 1.5 years beyond the standard of care due to a reduced rate of reduction in eGFR from pre-injection baseline.
+Added: Cortical thickness increased in the injected kidney from an average of 14 mm at time of injection to approximately 16 mm after one year.
+Added: Kidney function was preserved following the REACT injection by iohexol clearance and based on the subjects’
+Added: Subjects with a baseline anemia (n = 3 of 7) showed improved hemoglobin levels after REACT injection, and the remaining subjects maintained normal levels during the study.
+Added: Antihypertensive medication was reduced in three of six subjects during the first six months following injection with REACT.
+Added: The data from TNG-CL011 were accepted by FDA as part of a clinical data package submitted to progress to Phase 2.
+Added: Phase 2 Clinical Development (RMCL-001, RMCL-002, REGEN-003, and REGEN-007)
+Added: RMCL-001 was a Phase 2, open-label safety and efficacy study of REACT in subjects with type 2 diabetes and CKD.
+Added: The study commenced in May 2016 and was ended in May 2017.
+Added: The primary objective of this study was to assess the safety and efficacy of a second REACT injection using a minimally invasive percutaneous procedure that was done under conscious sedation as a same-day outpatient procedure.
+Added: A single subject with an eGFR of 14ml/min/1.73m2 was enrolled from the Phase 1 study (TNG-CL011) described above.
+Added: The second dose of REACT was manufactured from cryopreserved kidney cells obtained from the Phase 1 kidney biopsy.
+Added: The subject was administered a dose of 3x106 cells/g-KWest.
+Added: The subject’s eGFR increased to approximately 20 ml/min/1.73m2 for a period of eight months, after which the subject experienced a precipitous drop in kidney function and began hemodialysis.
+Added: The study was terminated by the sponsor of the clinical trial after this subject went onto dialysis and resources diverted to study RMCL-002.
+Added: RMCL-002 is an ongoing Phase 2, prospective, randomized, double-arm, deferred treatment, open-label, repeat dose, safety and efficacy study of REACT in subjects with type 2 diabetes and CKD.
+Added: The first subject was enrolled in this study in February 2017, and subjects are now undergoing follow-up.
+Added: The primary objective of this study is to assess the safety and efficacy of up to two REACT injections given six months (up to four weeks after target date) apart in Type 2 Diabetic Disease patients with eGFRs between 20 and 50 ml/min/1.73m2, with both doses delivered into the biopsied kidney using an outpatient, minimally invasive, percutaneous approach under conscious sedation in less than 90 minutes.
+Added: Patients received two doses of REACT of 3x106 cells/g-KWest.
+Added: Patients were randomized (1:1) to the active treatment group and the deferred treatment group (i.e., the control group) following kidney biopsy.
+Added: Subjects in the active treatment group receive their first REACT injection as soon as the REACT product is manufactured and shipped to the clinical site.
+Added: After six months (up to four weeks after target date), a second injection was given, as appropriate.
+Added: In contrast, subjects in the deferred treatment group will undergo a 12-month period of observation after kidney biopsy.
+Added: The deferred treatment group allows assessment of the rate of change in kidney function and co-morbidities in a nonexposed group compared to the active treated arm.
+Added: During this time, they received contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations every three months, similar to subjects in the active treatment group.
+Added: After 12 months, subjects from the deferred treatment group received a series of up to two REACT injections given six months (+/- four
+Added: weeks of the target date) apart, as appropriate.
+Added: Consequently, the study design includes a randomized control group receiving standard-of-care treatment for the first 12 months and a randomized, active treatment group receiving up to two REACT injections and follow-up evaluations during the same period of time.
+Added: In addition, each subject’s baseline rate of kidney decline, based on adequate historical and clinical data obtained 18 months prior to REACT injection, will serve as a comparator for monitoring the rate of progression of kidney insufficiency over time.
+Added: The aggregate number of subjects enrolled for the Phase 2 clinical trial was 83.
+Added: Upon withdrawal and/or replacement of 2 subjects, 81 subjects were enrolled as of December 2020, of which 41 subjects were enrolled into the active treatment group and 42 subjects were enrolled into the deferred treatment group.
+Added: As of December 31, 2022, 39 subjects enrolled in the active group had received their first injection, and 34 received their second.
+Added: No further injections will occur in the active group.
+Added: Thirty-four subjects in the deferred group have crossed over into the active group, with 34 subjects having received their first injection and 26 having received their second injection as of December 31, 2022.
+Added: The rate of progression of kidney function for the active treatment group, assessed via pre-randomized serial measurements of eGFR over 24 months after the last REACT injection, will be compared against that of the deferred treatment group.
+Added: In addition, each subject’s baseline rate of eGFR decline, derived from historical and clinical data, will be compared against the individual subject’s rate of eGFR decline through 24 months following the final REACT injection.
+Added: The rate of progression of kidney function of subjects, if any, who received a single REACT injection may be compared against that of subjects who received two REACT injections.
+Added: Patients will be followed for 24 months after their last REACT injection in part 1 of the trial.
+Added: An open label extension portion of the study (part 2) was added in February 2021 to follow all subjects for an additional 3 years.
+Added: Visits will be conducted at 3-month intervals to give a total of 5 years (part 1 + part 2) of follow-up after the last REACT injection.
+Added: Subjects in this trial will complete the Kidney Disease Quality of Life (“KDQOL”) survey, which is a subjective kidney-specific measure of health-related quality of life, and the EQ-5D-5L survey, which is a health- related quality of life questionnaire.
+Added: Scores from the active treatment group will be compared against scores from the deferred treatment group.
+Added: Subjects from the deferred treatment group will comprise the control group for the analysis of KDQOL scores.
+Added: In addition, each subject’s baseline score will be compared against his or her KDQOL scores obtained over the 24-month period after the last REACT injection.
+Added: KDQOL scores from subjects who received a single REACT injection may be compared against scores from subjects who received two injections.
+Added: Results as of the March 2022 interim analysis demonstrate that kidney function has been preserved in the subjects who have received a full course (2 injections) of REACT and has steadily declined in the deferred treatment group.
+Added: The overall mean total slope for the active treatment group is a positive (+5.0 ml/ min/1.73m2/year), whereas the overall mean total slope for the deferred treatment group is a decline (-3.9ml/ min/1.73m2/year).
+Added: This shows an effect difference of +8.9 ml/min/1.73m2/year in annualized change in kidney function between the active treatment group and the deferred treatment group.
+Added: Each slope is calculated using a simple linear regression between the average eGFR measurements on the first injection day and three, six, nine and 12 months following the last injection day, where the averages are assumed to be equally spaced.
+Added: The interim analysis as of March 2022 demonstrates there is a statistically significant difference in the average eGFR between treatment arms (subjects who received a full course of REACT compared to the standard of care) at six months post 2nd injection (p-value=0.032), nine months post second injection (p-value=0.02) and 12 months post second injection (p-value=0.02).The kidney biopsy and REACT injections are conducted as outpatient procedures and have been generally well tolerated by patients.
+Added: In the RMCL-002 trial, which used a different formulation of the REACT product and a different procedure than that presently used in our Phase 3 trials, one participant experienced serious adverse events that included scarring or fibrosis and a decrease in kidney function.
+Added: A second participant experienced decreased kidney blood flow observed on contract-enhanced computerized tomography (“CT”) imaging and a decrease in kidney function.
+Added: As of March 2023, serious renal-linked adverse events were observed in 4 of 83 participants in the RMCL-002 trial and included hematoma, acute kidney injury, blood transfusion, CKD progression, renal vascular event, cortical scarring, and pain.
+Added: Other adverse events reported have been commonly associated with the co-morbidities of Type 2 diabetes and similar to those seen in other small molecule CKD trials.
+Added: We have dosed all deferred subjects in 2022 and are on track to obtain additional interim data and complete all follow-up visits for all active subjects in the fourth quarter of 2023.
+Added: We also plan to complete all follow-up visits for deferred subjects by early 2024 and deliver the clinical study report by early 2025.
+Added: Results from interim data may not be indicative of results from future data.
+Added: REGEN-003 is a Phase 2, prospective open-label, single-arm, safety and tolerability study of REACT in subjects with type 2 diabetes and CKD, specifically those with high-risk late Stage 4 DKD.
+Added: This study commenced in March 2018, at which time the first subject was enrolled.
+Added: The early results were published online in January 2023 in the Journal of Blood Purification in a manuscript entitled, “Renal Autologous Cell Therapy (REACT) in Type 2 Diabetes with Late Stage 4 Diabetes-Related Chronic Kidney Disease:
+Added: Trial Design and Early Analysis”
+Added: doi.org/10.1159/000527582).
+Added: The primary objective of this study is to assess the safety and efficacy of up to two REACT injections given six months (up to four weeks after target date) apart in Type 2 Diabetic Kidney Disease patients with eGFRs between 14 and 20 ml/min/1.73m2 and delivered into the biopsied kidney using a minimally invasive percutaneous approach that can be delivered under conscious sedation in less than 90 minutes.
+Added: Subjects have an eGFR of between 14—20 ml/min/1.73m2.
+Added: Subjects receive up to two doses of REACT of 3x106 cells/g-KWest.
+Added: This study enrolled a total of ten adults (5 men and 5 women) with CKD resulting from type 2 DKD (kidney function measured by eGFR of 14-20 ml/min/1.73 m²).
+Added: Following a percutaneous kidney biopsy and ex vivo expansion of Selected Renal Cells (SRCs) that form REACT, the REACT product was injected into the cortex of the biopsied kidney with CT image guidance.
+Added: Nine participants received two doses of the REACT product at 6-month intervals;
+Added: one participant received only one injection.
+Added: A 6-month observation pre-trial was required to establish patients’
+Added: “own”
+Added: baseline and rate of DKD progression.
+Added: As of March 2023, there were no cell product-related serious adverse events reported.
+Added: Serious renal-linked adverse events related to the REACT procedure were reported in three participants, including acute kidney injury, CKD progression, renal arteriovenous fistula and hematomas which required observation without transfusion or angiographic interventions.
+Added: At the time of this analysis, dialysis was delayed a mean of 16 months (range 6-28 months).
+Added: At 15 months, two patients (20%) had preservation of their kidney function and had not advanced to renal replacement therapy.
+Added: One patient died due to complications related to COVID, and an additional subject died due to a myocardial infarction approximately 18 months after enrollment.
+Added: The results from this study suggest that REACT has the potential to delay dialysis in high-risk Stage 4 and Stage 5 DKD patients.
+Added: REGEN-007 is an ongoing Phase 2, prospective, randomized, open-label, repeat dose, double-arm, controlled safety and efficacy study of REACT in subjects with type 1 or 2 diabetes and CKD.
+Added: The primary objective of this study is to assess the safety and efficacy of up to two REACT injections given three months apart (up to 60 days after target date) in Type 1 and 2 Diabetic Kidney Disease with eGFRs between 20 and 50 ml/min/1.73m2) and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach, as compared to a single REACT injection followed by monitoring and a potential second injection delivered into the non-biopsied contralateral kidney using a minimally invasive percutaneous approach triggered by a 20% decrease in eGFR and/or a 30% increase in urinary albumin-to-creatinine ratio (“UACR”), that is delivered within 60 days of trigger being met.
+Added: In previous Phase 2 studies, we injected REACT into the same kidney twice.
+Added: Based on a generally favorable safety profile observed in previous studies, we are now proceeding with the injection of REACT into both kidneys in REGEN-007, which we expect will result in increased therapeutic effect as compared to injecting a single kidney, as the systemic effects of Type-2 diabetes mellitus impact both kidneys.
+Added: By injecting both kidneys, patients have maximal exposure to REACT cells, with the potential to impact a greater proportion of kidney mass.
+Added: Further, the number of glomeruli (the filtering units of the kidney) that are amenable to regenerative therapy is effectively doubled when injecting both kidneys, thereby allowing both kidneys to initiate healing and repair to improve function.
+Added: The main goal of REGEN-007 is to evaluate whether REACT injections in both kidneys as opposed to two injections in the same kidney will:
+Added: (a) increase the improvement of kidney function over and above the mean eGFR improvement observed in REGEN-002, or (b) increase the number of patients in which kidney function is preserved as compared to the number of patients in which this was observed in REGEN-002.
+Added: Subjects will receive up to two doses of REACT of 3x106 cells/g-KWest.
+Added: The study will enroll subjects between the ages of 30 and 80 with an eGFR >20 and ≤50 mL/min/1.73m2.
+Added: Subjects will be randomized (1:1) before kidney biopsy into two cohorts.
+Added: Cohort 1 will receive the two REACT injections three months apart.
+Added: Cohort 2 will receive the first REACT injection, and a trigger, as described below, must be met to qualify for the second REACT injection more than three months after the first dose.
+Added: This will allow a comparison of the effects of a specified amount of time between dosing, as compared to a biologic trigger between dosing.
+Added: Each of the subjects in cohort 1 will receive the first REACT injection as soon as the REACT product is manufactured and shipped to the clinical site.
+Added: After three months, subjects will receive a second injection, as appropriate.
+Added: Subjects in cohort 2 will also receive one REACT injection as soon as the REACT product is manufactured and shipped to the clinical site.
+Added: For cohort 2, a second REACT injection will only be administered if a subject meets one or more clinical surrogate marker criteria.
+Added: The second REACT injection will be administered to subjects in cohort 2 no less than three months after the first injection, within 30 days (up to four weeks after target date) of meeting the re-dose trigger.
+Added: The re-dose triggers include (1) a 30-day sustained decline in eGFR by at least 20% from baseline and (2) an increase in the baseline UACR of at least 30% greater than 30mg/gram, measured 30 days after the baseline measurement is taken.
+Added: For all subjects who receive a second injection, the second injection will be administered in the non-biopsied contralateral kidney.
+Added: During this time, subjects in cohort 2 will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at one, 14 (up to 7 days after target date) and 28 days (up to 7 days after target date) following the first injection, and then at three months (up to 10 days after target date) following the first injection, similar to subjects in cohort 1.
+Added: All subjects will continue with long-term follow-up visits at three- month intervals for a period of 18 months following the last injection.
+Added: In addition, each subject’s baseline rate of kidney decline, based on adequate historical, clinical data obtained 24 months
+Added: prior to the first REACT injection, will serve as a comparator for monitoring the rate of progression of renal insufficiency over time.
+Added: The primary efficacy endpoint of REGEN-007 is improvement in the rate of kidney function decline as indicated by the change from pre-injection baseline value in total (acute + chronic) slope of eGFR over 18 months.
+Added: The primary safety endpoint is treatment-emergent adverse events through 18 months following the last REACT injection.
+Added: REGEN-007 is an unblinded study in which cohort 1 patients will receive the same treatment regimen as the patients in our Phase 3 program that are randomized to the active arms.
+Added: We believe that REGEN-007 may provide some insights regarding the magnitude of clinical benefit that could be observed in our Phase 3 program.
+Added: We commenced enrollment for REGEN-007 in the third quarter of 2021 and expanded target enrollment from 30 to up to 50 subjects as a result of strong investigator interest.
+Added: As of December 31, 2022, 35 subjects were enrolled with 18 subjects randomized to cohort 1 and 17 subjects randomized to cohort 2.
+Added: As of that date, 13 subjects in cohort 1 had received their first dose of REACT, seven of whom received a second dose into the contralateral kidney, and 12 subjects in cohort 2 received their first dose of REACT, with one subject having met a re-dose trigger receiving a second injection in the contralateral kidney.
+Added: As of March 2023, serious renal-linked adverse events related to the REACT procedure were observed in 4 out of 39 participants, including hematomas, transfusion, acute kidney injury, and hematuria with the biopsy.
+Added: We anticipate reporting interim data from this study from a limited number of patients in the second half of 2023.
+Added: Phase 3 Clinical Development:
+Added: proact 1 and proact 2 (REGEN-006 and REGEN-016):
+Added: We applied for RMAT designation for REACT, which was granted by the FDA on October 28, 2021.
+Added: As contemplated by the RMAT designation and as directed by the FDA, we requested a comprehensive, multidisciplinary Type B meeting with the FDA to review the status of preclinical and clinical development and manufacturing of REACT, and to discuss the planned clinical program intended to support approval of the product candidate.
+Added: The FDA provided detailed written responses to our questions included in the meeting request, and the Type B meeting was held in March 2022.
+Added: As a result of that meeting, we made some modifications to the Phase 3 trial designs and endpoints, including the following:
+Added: increased the planned sample size from 500 to 600 subjects in both REGEN-006 and REGEN-016;
+Added: removed the increase in UACR of at least 30% and of at least 30 mg/g, using the random urine microalbumin/urine creatinine ratio sustained for 90 days, from the primary composite endpoint for both REGEN-006 and REGEN-016;
+Added: added a sham control arm and single blind component to the design of REGEN-016 and composite time-to-event composed of:
+Added: at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days;
+Added: eGFR <15 mL/min/1.73m²
+Added: using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant;
+Added: renal or cardiovascular death.
+Added: We will continue to advance the USA clinical development program with the benefit of enhanced clarity as to the FDA’s expectations and requirements for a registrational program, including the design of the trials needed for approval, manufacturing assays, and comparability studies, as set forth below.
+Added: REGEN-006/proact 1 trial:
+Added: REGEN-006 (proact 1) is a Phase 3, randomized, single-blinded, bi-lateral kidney dose, sham control arm, controlled efficacy study of REACT in subjects with type 2 diabetes and CKD Stages 3a-4 with moderate to severe albuminuria.
+Added: Albuminuria refers to the presence of an excess of the protein albumin in urine, which is a sign of kidney disease.
+Added: This study will be conducted in clinical centers in the United States, Canada, Australia, Israel, Mexico, Taiwan and the United Kingdom.
+Added: The primary objective of this study is to assess the efficacy of up to two REACT injections given three months apart and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach.
+Added: The total planned enrollment is 600 subjects.
+Added: Subjects in the treatment group will receive two doses of REACT of 3x106 cells/g-KWest.
+Added: The study will enroll subjects between the ages of 30 and 80 years of age with an eGFR >2 0 and <5 0 mL/min/1.73m2.
+Added: The primary composite endpoint is the time from first injection to the earliest of:
+Added: at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days;
+Added: eGFR <15 mL/min/1.73m²
+Added: using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant;
+Added: renal or cardiovascular death.
+Added: Subjects will be randomized (1:1) to the treatment group and the “masked”
+Added: sham control group prior to kidney biopsy.
+Added: Each of the subjects in the treatment group will receive the first REACT injection 12 weeks following kidney biopsy.
+Added: After three months, a second injection will be given, as appropriate, into the contralateral kidney.
+Added: In contrast, subjects in the control group will receive two sham injections, the first of which will be administered 12 weeks following sham biopsy, and the second of which will be administered three months after the first sham injection.
+Added: During this time, subjects in the control (sham) group will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at one, 14 and 28 days (+7 days) following the first injection, and then at three months (+10 days) following the first injection, similar to subjects in the treatment group.
+Added: All subjects will continue in the study until the global trial end date is announced and an end of study visit is completed.
+Added: Subjects will complete the KDQOL and EQ-5D-5L surveys.
+Added: Scores from the treatment group will be compared against scores from the control group.
+Added: In addition, each subject’s baseline score will be compared against his or her KDQOL scores obtained over the 24-month period after the last REACT injection.
+Added: Additionally, KDQOL scores from subjects who received a single REACT injection may be compared against scores from subjects who received two injections.
+Added: This study began enrollment in the first quarter of 2022.
+Added: As of December 31, 2022, 88 subjects had signed informed consent forms, with 38 subjects randomized in the US and Canada.
+Added: Enrollment in Australia, Mexico, the UK and Taiwan is expected to begin in 2023.
+Added: Initial interim data is expected at the end of 2024.
+Added: Results from interim data may not be indicative of results from future data.
+Added: REGEN-016/proact 2:
+Added: REGEN-016 (proact 2) is a planned Phase 3, randomized, single-blinded, sham control arm, bi-lateral kidney dose, controlled efficacy study of REACT in subjects with type 2 diabetes and CKD Stages 3a-4 with moderate to severe albuminuria.
+Added: This study will be implemented in clinical centers in Europe, Latin America, and Asia-Pacific and some United States centers.
+Added: The primary objective of this study is to assess the efficacy of up to two REACT injections given three months apart and delivered into biopsied and non-biopsied contralateral kidneys using a minimally invasive percutaneous approach.
+Added: The total planned enrollment is 600 subjects.
+Added: Subjects in the treatment group will receive two doses of REACT of 3x106 cells/g-KWest.
+Added: The study will enroll subjects between the ages of 30 and 80 years of age with an eGFR >2 0 and <5 0 mL/min/1.73m2.
+Added: Subjects will be randomized (1:1) to the treatment group and the “masked”
+Added: sham control group prior to kidney biopsy.
+Added: Each of the subjects in the treatment group will receive the first REACT injection 12 weeks following kidney biopsy.
+Added: After three months, a second injection will be given, as appropriate, into the contralateral kidney.
+Added: In contrast, subjects in the control group will receive two sham injections, the first of which will be administered 12 weeks following sham biopsy, and the second of which will be administered three months after the first sham injection.
+Added: During this time, subjects in the control group will receive contemporaneous, standard-of-care therapy for CKD while undergoing follow-up evaluations at the same time intervals as subjects in the treatment group.
+Added: All subjects will continue in the study until the global trial end date is announced and an end of study visit is completed.
+Added: The primary composite endpoint is the time from first injection to the earliest of:
+Added: at least 40% reduction in eGFR, using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days;
+Added: eGFR <15 mL/min/1.73m²
+Added: using the 2009 CKD-EPI serum creatinine equation, sustained for 30 days and/or chronic dialysis, and/or renal transplant;
+Added: renal or cardiovascular death.
+Added: Subjects will complete the KDQOL and EQ-5D-5L surveys.
+Added: Scores from the treatment group will be compared against scores from the control group.
+Added: In addition, each subject’s baseline score will be compared against his or her KDQOL scores obtained over the period after the last REACT injection.
+Added: Additionally, KDQOL scores from subjects who received a single REACT injection may be compared against scores from subjects who received two injections.
+Added: Enrollment in this study is expected to begin in the second quarter of 2023.
+Added: We plan to evaluate interim data for REGEN-016 in mid-2025, with the potential for conditional FDA approval anticipated in 2026.
+Added: Congenital Anomalies of the Kidney and Urinary Tract (CAKUT)
+Added: CAKUT is a group of abnormalities affecting the kidneys or other structures of the urinary tract.
+Added: CAKUT results from abnormal development of the urinary tract system and is present at birth (i.e., it is congenital), although the abnormality may not become apparent until later in life.
+Added: CAKUT is the most common kind of congenital birth defect, affecting roughly 1 in 500 babies born.
+Added: Individuals with CAKUT have one or more kidney or urinary tract abnormalities.
+Added: The parts of the urinary tract that may be affected include the bladder, the tubes that carry urine from each kidney to the bladder (the ureters), and the tube that carries urine from the bladder out of the body (the urethra).
+Added: For paired structures, like the kidneys and ureters, one or both may be affected.
+Added: There are various types of CAKUT.
+Added: Many different developmental abnormalities are classified as CAKUT, including underdevelopment or absence of a kidney and nephrons, a kidney formed of fluid-filled sacs called cysts, buildup of urine in the kidneys, an extra ureter leading to the kidney, a blockage in a ureter where it joins the kidney, an abnormally wide ureter, backflow of urine from the bladder into the ureter, and an abnormal membrane in the prostatic urethra that blocks the flow of urine out of the bladder.
+Added: The causes of CAKUT are complex, and much remains to be uncovered about the genetic and environmental regulators of kidney and outflow tract development.
+Added: It is likely that a combination of genetic and environmental factors contribute to the formation of kidney and urinary tract abnormalities.
+Added: The genetic factors involved in most cases of CAKUT are unknown.
+Added: Syndromic CAKUT is caused by changes in the genes associated with the particular syndrome.
+Added: Variations in these same genes can also underlie some cases of isolated CAKUT.
+Added: In addition, environmental factors may influence development of CAKUT.
+Added: The risk of CAKUT is higher in babies whose mothers had diabetes, took certain medications that are harmful to the kidneys, such as some anti-seizure medicines, or lacked certain vitamins and minerals, such as folate and iron, during pregnancy.
+Added: Most cases of CAKUT are diagnosed from antenatal ultrasound imaging, and the remaining cases of CAKUT are usually only diagnosed after an infant or child develops a urinary tract infection, prompting ultrasound and/or other imaging studies to examine the kidneys and outflow tracts.
+Added: CAKUT is often one of several features of a condition that affects multiple body systems, and it varies in severity.
+Added: The abnormalities can result in recurrent urinary tract infections or a buildup of urine in the urinary tract, which may damage the kidneys or other structures.
+Added: Severe CAKUT can lead to life-threatening kidney failure and ESRD.
+Added: Children with severe CAKUT may require dialysis and transplantation as infants, and they may experience long-term effects on their ability to lead independent lives as adults.
+Added: There is currently a need for greater understanding of the pathogenesis of CAKUT, as well as an unmet need for means for providing proper treatment of those affected by this condition.
+Added: Phase 1 (REGEN-004):
+Added: REGEN-004 is a Phase 1, prospective, open-label, single-arm, safety, tolerability, and early efficacy study of REACT in subjects with CKD from CAKUT.
+Added: The primary objective of this study is to assess the safety and efficacy of up to two REACT injections given six months (up to four weeks after target date) apart and delivered into the biopsied kidney using a minimally invasive percutaneous approach that can be delivered under conscious sedation in less than 90 minutes in patients with Chronic Kidney Disease with eGFRs between 14 and 50 ml/min/1.73m2 due to CAKUT.
+Added: Five subjects were enrolled in this trial.
+Added: Subjects received two doses of REACT of 3x106 cells/g-KWest.
+Added: As of December 31, 2022, all five subjects had received their first injection, and four subjects had received both injections.
+Added: The trial concluded in January 2023 with the last patient, last visit.
+Added: Early interim results as of August 2021 demonstrated that in three of the five subjects currently enrolled, kidney function had improved to an annualized eGFR slope of 3.38 ml/min/1.73m2/year compared to their pre-dose slope of negative-4.19ml/min/1.73m2/year.
+Added: As of January 2023, there have been no adverse events reported to be associated with REACT and no reported procedure-related renal related serious adverse events in this trail.
+Added: The final clinical study report is anticipated in the third quarter of 2023.
+Added: Planned Studies
+Added: Phase 2 (REGEN-015 Multi-dose study)
+Added: REGEN-015 is a planned Phase 2 open-label study of REACT in subjects with type 1 or type 2 diabetes and CKD.
+Added: The purpose of this study is to evaluate the safety of supplemental REACT injections in participants who have previously received REACT treatment.
+Added: In this study, up to 10 participants will enroll in the trial after parent REACT protocol end of study visit is completed.
+Added: Participants may undergo a biopsy to manufacture REACT if additional biopsy tissue is required.
+Added: Participants will receive two supplemental REACT injections.
+Added: All participants will be followed for 12 months post their last supplemental REACT injection.
+Added: Phase 4 Clinical Development (REGEN-008)
+Added: REGEN-008 is a Phase 4, prospective, open-label, observational master protocol study of REACT in subjects with diabetes and CKD who were previously enrolled and treated with REACT.
+Added: Additional sub-study protocols will be created to capture subjects from parent protocols.
+Added: The primary objective of this study is to evaluate the long-term safety of up to two REACT injections given three-six months apart on kidney function in participants with diabetes and CKD.
+Added: Subjects with exposure to REACT will continue for long-term follow-up observation visits which will occur every 3 months for the first 2 years and then every 6 months for years 3, 4, and 5, alternating in-person and telephone visits, for a total of 15 planned visits for the duration of the study.
+Added: We plan to continue REGEN-008 long-term follow-up to 2030.
+Added: The biotechnology and pharmaceutical industries are characterized by rapid technological advancement, significant competition, and an emphasis on intellectual property.
+Added: We face potential competition from many different sources, including major and specialty pharmaceutical and biotechnology companies, including developers of tubular and glomerular cell drug modulators, e.g., SGLT2 inhibitors, antifibrosis medications, e.g., Mineralocorticoid Receptor Antagonists (“MRAs”), induced pluripotent cells, other autologous mesenchymal stem cells and mechanical renal assist devices such as implantable and wearable renal dialysis machines, and advances in peritoneal dialysis and home dialysis.
+Added: Cell-based clinical trials by other companies are underway globally with umbilical, adipose and bone marrow derived mesenchymal stem cells for CKD.
+Added: Early-phase human induced pluripotent stem cell therapies for kidney diseases are ongoing in Japan.
+Added: Any product candidates that we successfully develop and commercialize will compete with current therapies and new therapies that may become available in the future.
+Added: We believe that the key competitive factors affecting the success of any of our product candidates will include efficacy, safety profile, dosing, cost, effectiveness of promotional support and intellectual property protection.
+Added: With respect specifically to REACT, we expect the key competitive factors affecting its success, if approved, will include the intended patient population, the relative convenience of dosing and administration, and efficacy.
+Added: Many other companies working on medications for controlling chronic kidney disease, either alone or with their collaboration partners, have significantly greater financial resources and expertise in research and development, pre-clinical testing, clinical trials, manufacturing, and marketing than we do.
+Added: We believe that our principal competitors include developers of SGLT2 inhibitors, including canagliflozin (marketed as Invokana® by companies including Janssen Pharmaceuticals, Inc.), dapagliflozin (marketed under the brand names Farxiga® and Forxiga® by companies including AstraZeneca plc and Bristol-Myers Squibb Company), empagliflozin (marketed as Jardiance® by companies including Boehringer Ingelheim and Eli Lilly and Company) and finerenone (marketed as Kerendia® by companies including Bayer AG), and MRAs, which are small-molecule therapies recently approved to lower risks of CKD progression.
+Added: Future collaborations, mergers and acquisitions may result in further resource concentration among a smaller number of competitors.
+Added: Our commercial potential could be reduced or eliminated if our competitors develop and commercialize products that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than products that we may develop.
+Added: Our competitors also may obtain FDA or other regulatory approval for their products more rapidly than we may obtain approval for ours, which could result in our competitors establishing a strong market position before we are able to enter the market or make our development more complicated.
+Added: These competitors may also vie for a similar pool of qualified scientific and management talent, sites and patient populations for clinical trials, as well as for technologies complementary to, or necessary for, our programs.
+Added: Supply and Manufacturing
+Added: We believe that over the last 20 years we have optimized our manufacturing technology for chemistry, manufacturing, and controls (“CMC”).
+Added: In doing so, we have established a considerable intellectual property estate, combined with extensive manufacturing know-how, to enable us to manufacture REACT with consistent quality.
+Added: With support from high level manufacturing and regulatory expertise, our internal manufacturing capabilities have enabled us to progress rapidly through our clinical trials.
+Added: We believe that our current manufacturing capacities enable us to provide sufficient quantities of clinical trial material to supply our clinical trials.
+Added: As we continue to develop our product candidates, we may need to expand our manufacturing capacities.
+Added: The manufacturing facilities located in Winston-Salem, North Carolina and the quality systems are intended to be compliant with global quality standards.
+Added: It usually takes approximately 12 weeks to produce the clinical REACT products.
+Added: As of the date hereof, our manufacturing team, facilities, and bioprocess capacity have produced over 200 cell therapies.
+Added: Our facility design and quality systems have been audited by European Qualified Persons (QP) and certified as compliant with EU cGMP requirements for phase 2/3 manufacturing.
+Added: Our bioprocesses have been reviewed by the FDA and EMA and validation activities are ongoing in anticipation of being commercial-ready for the potential launch of REACT.
+Added: We plan to build additional manufacturing capacity to meet the expanding demand.
+Added: Our commercial strategy focuses on process automation to scale up to meet the projected market for REACT, if we obtain the necessary regulatory approvals.
+Added: We are collaborating with engineering companies such as DEKA Research & Development Corp.
+Added: to develop automated manufacturing processes for the potential commercial production of REACT, including a REACT launch facility after we complete the Phase 3 patient enrollment and dosing in 2026, and two commercial manufacturing facilities after we launch REACT.
+Added: We expect to utilize automation in all aspects of manufacturing ranging from tissue processing, cell expansion and renal cell selection to formulation and filling of the final product.
+Added: We will also extend automation to other manufacturing activities, including warehouse operations and supply chain.
+Added: In addition, we intend to improve bioprocess development to further reduce manufacturing costs of the commercial REACT product, assuming receipt of necessary regulatory approvals.
+Added: Culture media represents the highest cost in REACT processing, and we are exploring reduced culture media usage via bioprocess and automation improvements.
+Added: Further, our final commercial REACT product is planned to be a cryopreserved formulation, which we expect to reduce manufacturing costs compared to our fresh REACT formulation.
+Added: We expect to leverage bulk purchasing to actively negotiate pricing of materials to further drive cost reductions.
+Added: However, there can be no assurance that the manufacturing costs for our Phase 3 trials when we manufacture REACT at commercial scale will actually be lower than for our ongoing Phase 2 RMCL-002 study.
+Added: A number of factors may contribute to an inability to achieve these cost reductions, including any failures to achieve the automation efficiencies that we anticipate, cost overruns or inefficiencies in the supply chain and any failure to improve the formulation or bioprocessing of REACT in a manner that results in lower costs.
+Added: Key Agreements
+Added: Master Services Agreement, dated February 15, 2021, by and between George Clinical PTY Limited and ProKidney-KY
+Added: ProKidney-KY entered into a Master Services Agreement dated February 15, 2021 (the “George Clinical MSA”) with George Clinical PTY Limited (“George Clinical”), upon which George Clinical agreed to provide ProKidney-KY with certain clinical research services pursuant to work orders, including the setup and management of an Endpoint Adjudication Committee for the REGEN-006 trial and verification process for the REGEN-007 trial, as well as a Data Safety Monitoring Board and a Steering Board Committee for ProKidney-KY’s development programs.
+Added: ProKidney-KY and George Clinical agreed to indemnify each other against certain third-party claims.
+Added: The George Clinical MSA will continue until February 15, 2026, unless terminated earlier by either party.
+Added: ProKidney-KY may terminate the George Clinical MSA upon 30 days’
+Added: prior written notice to George Clinical for any reason.
+Added: Either party may terminate the George Clinical MSA (i) for material breach by the other party if, upon 30 days’
+Added: prior written notice by the non-breaching party, the breach has not been cured, or (ii) upon the insolvency or declaration of bankruptcy of the other party.
+Added: ProKidney-KY may terminate any work order immediately if (i) the relevant study is terminated, or (ii) George Clinical breaches a material term of the George Clinical MSA or does not perform the services to ProKidney-KY’s reasonable satisfaction and does not remedy the breach or perform satisfactorily within 30 days of receiving a notice from ProKidney-KY specifying the nature of the breach or non-performance.
+Added: George Clinical may terminate any work order upon written notice if it believes on reasonable grounds that continued performance of the services poses an unacceptable risk to patient safety or may violate regulatory or scientific standards.
+Added: Research, Development, Engineering Services and License Memorandum and Agreement, dated January 16, 2022, by and between ProKidney-KY and DEKA Products Limited Partnership
+Added: ProKidney-KY entered into a Research, Development, Engineering Services and License Memorandum and Agreement dated January 16, 2022 (the “RDELA”) with DEKA Products Limited Partnership and its general partner DEKA Research & Development Corp.
+Added: (collectively, “DEKA”) under which DEKA will work with ProKidney-KY to develop certain technology to enhance the Company’s manufacturing and delivery capabilities for REACT.
+Added: Under the RDELA, ProKidney-KY pays DEKA for its work on these research and development projects on a cost-plus model.
+Added: DEKA owns the resulting IP and grants ProKidney-KY an exclusive, royalty-free, world-wide license to the resulting IP for purposes related to the provisions of cell therapy for the treatment of renal insufficiency.
+Added: Under the terms of the RDELA, ProKidney-KY agrees to indemnify DEKA for claims arising out of the use of the technology licensed to ProKidney-KY (including losses related to IP infringement claims and personal injury or products liability claims) and DEKA agrees to indemnify ProKidney-KY for claims arising out of the use of the technologies developed and licensed to third parties.
+Added: The term of the RDELA extends through the commercial life of any licensed technology developed thereunder subject to termination for breach and for ProKidney-KY’s convenience.
+Added: The initial payment for DEKA’s work under the RDELA was made through the issuance of 2,750,000 Class B-1 Units of ProKidney Management Equity LLC.
+Added: All subsequent payments have been and will be made by ProKidney-KY in cash.
+Added: Master Agreement for Clinical Trials Services, dated April 2, 2020, by and between ProKidney-KY and Frenova, LLC
+Added: ProKidney-KY entered into a Master Agreement for Clinical Trials Services, dated April 2, 2020 (the “Frenova MSA”) with Frenova, LLC d/b/a Frenova Renal Research (“Frenova”), under which Frenova agreed to provide ProKidney-KY with certain services related to the implementation and management of clinical development programs pursuant to statements of work (“SOWs”) encompassing such services for ProKidney-KY’s protocols RMCL-002, REGEN-006 and REGEN-007.
+Added: The Frenova MSA has an initial term of five years, or until terminated by either party, and will automatically renew each year for one-year periods, unless either party notifies the other party in writing at least 60 days prior to the renewal date that the notifying party wishes to terminate the Frenova MSA.
+Added: ProKidney-KY may terminate the Frenova MSA or any SOW thereunder upon 60 days’
+Added: prior written notice to Frenova for any reason.
+Added: Frenova may terminate the Frenova MSA for material breach under the Frenova MSA by ProKidney-KY if, upon 60 days’
+Added: prior written notice, the breach has not been cured.
+Added: Additionally, Frenova may terminate any SOW upon 30 days’
+Added: prior written notice if (i) ProKidney-KY cancels or materially delays the requested services;
+Added: (ii) unanticipated material changes to the project assumptions cannot be addressed to both parties’
+Added: satisfaction;
+Added: (iii) changes to the study protocol cause enrollment targets to become commercially unreasonable;
+Added: or (iv) ProKidney-KY is unable to make timely payments to Frenova resulting in Frenova lacking funds to process payments to the trial sites.
+Added: Either party may terminate the Frenova MSA or any SOW thereunder (i) upon the insolvency or declaration of bankruptcy of the other party, (ii) if the other party is excluded, suspended, sanctioned or otherwise restricted from participating in federal health care programs, or (iii) the performance of the service would constitute a potential or actual violation of legal, regulatory, scientific, or ethical standards.
+Added: ProKidney-KY and Frenova also agreed to indemnify each other against certain third-party claims.
+Added: Master Services Agreement, dated May 1, 2019, by and between PPD Development, LP and ProKidney-KY
+Added: ProKidney-KY entered into a Master Services Agreement dated May 1, 2019 (the “PPD MSA”) with PPD Development, L.P.
+Added: (“PPD”), under which PPD agreed to perform clinical development services in connection with ProKidney-KY’s clinical research programs, and ProKidney-KY agreed to pay PPD in accordance with rates for such services, as set forth in the project addenda.
+Added: The PPD MSA has an initial term of five years and may be extended by mutual written agreement of the parties.
+Added: ProKidney-KY may terminate any project addendum under the PPD MSA without cause upon 30 days’
+Added: prior written notice.
+Added: Either party may terminate any project addendum under the PPD MSA upon the other party’s breach of the PPD MSA or project addendum upon 30 days’
+Added: prior written notice, provided that the breach is not cured within such 30-day period.
+Added: Either party may terminate the PPD MSA or any project addendum thereunder upon the occurrence of certain insolvency events.
+Added: ProKidney-KY and PPD also agreed to indemnify each other against certain third-party claims.
+Added: Master Services Agreement, dated August 14, 2015, by and between CTI Clinical Trial Services Inc.
+Added: and RegenMedTX, LLC
+Added: RegenMedTX, LLC (“RegenMedTX”), then a subsidiary of ProKidney-KY, entered into a Master Services Agreement dated August 14, 2015 (the “CTI MSA”) with CTI Clinical Trial Services, Inc.
+Added: & CTI Clinical Consulting Services, Inc.
+Added: (“CTI”), under which CTI agreed to provide RegenMedTX with certain clinical research or design and development services in connection with ProKidney-KY’s clinical trials pursuant to work orders.
+Added: RegenMedTX will own all materials, documents and information obtained by, developed by or provided to CTI by or on behalf of RegenMedTX as a part of CTI’s services or any work order thereunder.
+Added: The CTI MSA will continue unless terminated by the parties.
+Added: Either party may terminate the CTI MSA or a work order for any reason upon 90 days’
+Added: prior written notice to the other party or for material breach by the other party upon 30 days’
+Added: written notice, provided that the material breach has not been cured within the 30-day period.
+Added: RegenMedTX may immediately terminate the CTI MSA, or a work order thereunder, if (i) the FDA withdraws authorization and approval to conduct a study or (ii) RegenMedTX reasonably determines that for medical, clinical or patient safety reasons, a study should terminate immediately.
+Added: Laboratory Service Agreements with LabCorp
+Added: Laboratory Service Agreement, dated August 16, 2016, by and among Covance Central Laboratory Services LP, Covance Central Laboratory Services SA` RL and ProKidney-KY
+Added: In August 2016, ProKidney-KY entered into a Laboratory Service Agreement with Covance Central Laboratory Services LP and Covance Central Laboratory Services SA` RL (now known as Labcorp, as described further below) (the “2016 LSA”), under which Labcorp agreed to perform certain services for ProKidney-KY’s protocol RMCL-002.
+Added: The initial term of the 2016 LSA was 42 months, subject to automatic renewal for successive one-year periods unless a party provides the other party with written notice of its intention to not renew at least 60 days prior to the commencement of a renewal term.
+Added: Either party may terminate the 2016 LSA upon written notice to the other party, effective immediately, if (i) the other party commits a material breach of any term of the 2016 LSA and fails to remedy such breach within a 30-day period, (ii) the other party repeatedly breaches any term of the 2016 LSA, (iii) anyone commences bankruptcy proceedings against the other party, which proceedings are not dismissed within 60 days, (iv) a court of competent jurisdiction appoints a custodian for the other party or substantially all of its assets, (v) the other party fails to pay its debts as they fall due, or (vi) any event occurs or proceeding is initiated having a similar effect to the events mentioned above.
+Added: ProKidney-KY may terminate the 2016 LSA for any reason upon 90 days’
+Added: prior written notice to Labcorp.
+Added: ProKidney-KY granted Labcorp an unrestricted, royalty-free license to aggregate and use any system data produced by or for Labcorp as part of the services with other system data owned or licensed by Labcorp provided Labcorp does not identify such data as belonging to ProKidney-KY.
+Added: Laboratory Service Agreement, dated August 1, 2017, by and among Covance Central Laboratory Services LP, Covance Central Laboratory Services SA` RL and ProKidney-KY
+Added: In August 2017, ProKidney-KY entered into a Laboratory Service Agreement with Labcorp (the “2017 LSA”).
+Added: Under the terms of the 2017 LSA, Labcorp agreed to perform certain services for ProKidney’s protocol REGEN-003.
+Added: The 2017 LSA has substantially similar terms and termination provisions to the 2016 LSA.
+Added: Laboratory Service Agreement, dated June 21, 2019, by and among Covance Central Laboratory Services LP, Covance Central Laboratory Services SA` RL and ProKidney-KY
+Added: In June 2019, ProKidney-KY entered into a Laboratory Service Agreement with Labcorp (the “2019 LSA”).
+Added: Under the terms of the 2019 LSA, Labcorp agreed to perform certain services for ProKidney-KY’s protocol REGEN-004.
+Added: The 2019 LSA has an initial term of 50 months and will renew automatically for successive one-year periods unless a party provides the other party with written notice of its intention to not renew at least 60 days prior to the commencement of a renewal term.
+Added: The parties may terminate the 2019 LSA under terms that are substantially similar to the termination provisions of the 2016 LSA and 2017 LSA.
+Added: Laboratory Service Agreement, dated September 16, 2021, by and among Labcorp Central Laboratory Services LP, Labcorp Central Laboratory Services SA` RL and ProKidney-KY
+Added: ProKidney-KY and Labcorp Central Laboratory Services LP (formerly known as Covance Central Laboratory Services LP) and Labcorp Central Laboratory Services SA` RL (formerly known as Covance Central Laboratory Services SA` RL) (Collectively, “Labcorp”) entered into a Laboratory Service Agreement dated September 16, 2021 (the “Labcorp LSA”), under which Labcorp agreed to perform certain services for ProKidney-KY’s protocol REGEN-006.
+Added: The term of the Labcorp LSA will continue until the conclusion of the REGEN-006 study.
+Added: Either party may terminate the Labcorp LSA under terms that are substantially similar to the termination provisions of the 2016 LSA, the 2017 LSA and the 2019 LSA, as well as pursuant to certain insolvency events.
+Added: ProKidney-KY and Labcorp also agreed to indemnify each other against certain third-party claims.
+Added: ProKidney-KY granted Labcorp an unrestricted, royalty-free license to aggregate and use any system data produced by or for Labcorp as part of the services with other system data owned or licensed by Labcorp provided Labcorp does not identify such data as belonging to ProKidney-KY.
+Added: Intellectual Property
+Added: Our success depends in part on our ability to obtain and maintain proprietary protection for our product candidates, technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from infringing our proprietary rights.
+Added: Our policy is to seek to protect our proprietary position by, among other methods, pursuing and obtaining patent protection in the United States and in jurisdictions outside of the United States related to our proprietary technology, inventions, improvements, and product candidates that are important to the development and implementation of our business.
+Added: For example, we have or are pursuing patents covering the composition of matter for each of our product candidates and we generally pursue patent protection covering methods-of-use for each clinical trial.
+Added: We also rely on trade secrets, know-how, continuing technological innovation and potential in-licensing opportunities to develop and maintain our proprietary position.
+Added: Additionally, we expect to benefit, where appropriate, from statutory frameworks in the United States, Europe and other countries that provide a period of clinical data exclusivity to compensate for the time required for regulatory approval of our products.
+Added: We continually assess and refine our intellectual property strategy as we develop new technologies and product candidates.
+Added: We plan to file additional patent applications based on our intellectual property strategies where appropriate, including where we seek to adapt to competition or to improve business opportunities.
+Added: Further, we plan to file patent applications, as we consider appropriate under the circumstances, to protect new technologies that we develop.
+Added: To cover our proprietary technologies, proprietary cell-based REACT product and related methods, such as methods of use, we have filed patent applications representing 15 patent families.
+Added: As of December 31, 2022, our patent estate, which is solely owned, included 286 total issued patents or pending patent applications with nine issued U.S.
+Added: patents, nine pending U.S.
+Added: non-provisional patent applications, two pending U.S.
+Added: provisional patent applications, two pending Patent Cooperation Treaty (PCT) applications, 160 issued foreign patents and 104 pending foreign patent applications in various foreign jurisdictions.
+Added: Specifically, our patent family with claims directed to cells formulated in REACT, implantable constructs, and methods of using the same to, for example, improve kidney function or treat kidney disease, includes 31 issued patents and nine pending patent applications.
+Added: Patents in this family have been issued in nine jurisdictions, including the United States (three issued patents), Europe (two issued patents, each separately validated in seven countries), China, Japan, and South Korea.
+Added: Issued patents and any further patents that may be issued from this family’s nine pending applications are expected to expire in 2029 absent any patent term adjustments or extensions.
+Added: We also own two patent families directed to our REACT formulations and methods of preparing the formulations.
+Added: Across these families, we have 16 issued patents in multiple jurisdictions, including the United States, China, Japan, South Korea, and Canada.
+Added: We also have 13 patent applications that are pending in multiple jurisdictions, including Europe, China, Canada, Mexico, and Australia.
+Added: Patents across these two patent families, including any patents that may be issued from the pending applications, are expected to expire between 2031 and 2038, depending upon their respective filing dates and absent any patent term adjustments or extensions.
+Added: Additionally, we own two patent families with claims directed to quality control methods for ensuring that renal cells for formulation in REACT, prepared by our proprietary methods, have phenotypic and functional profiles indicative of therapeutic activity.
+Added: Within the first patent family, we have 58 issued patents in various jurisdictions, including the United States (two issued patents), Europe (two issued patents, one of which has been validated in 21 countries and the other has been validated in 20 countries), China, Japan (two issued patents), South Korea (two issued patents), Hong Kong, Australia (two issued patents), and New Zealand (two issued patents) and are expected to expire in 2033 absent any patent term adjustments or extensions.
+Added: We also have nine patent applications that are pending in multiple jurisdictions, including the United States, Europe, Australia, China, and South Korea, and are expected to expire in 2033 absent any patent term adjustments or extensions.
+Added: Our second patent family includes a PCT stage application.
+Added: Any patents that issue from a national or regional stage application filed from this PCT application are expected to expire in 2041 absent any patent term adjustments or extensions.
+Added: We further own three patent families directed to methods of improving kidney function and/or in treating kidney disease, e.g., diabetic kidney disease or kidney disease resulting from a congenital anomaly.
+Added: Across these families, we have three issued patents, including one U.S.
+Added: patent and 30 pending patent applications filed in 15 jurisdictions, including the United States, Europe, Hong Kong, China, Korea, Japan, Australia, Brazil, Mexico, Israel, Canada, and Mexico.
+Added: Our issued U.S.
+Added: patent is expected to expire in 2037 absent any patent term adjustments or extensions.
+Added: Patents across all three patent families, if issued, are expected to expire between 2036 and 2042, depending upon their respective filing dates and absent any patent term adjustments or extensions.
+Added: In addition, we plan to file additional applications on aspects of our innovations that may have patent terms that extend beyond these dates.
+Added: The term of individual patents depends upon the laws of the countries in which they are obtained.
+Added: In the countries in which we currently file, the patent term is 20 years from the earliest date of filing of a non-provisional patent application, which serves as a priority application.
+Added: However, the term of a U.S.
+Added: patent may be extended to compensate for the time required to obtain regulatory approval to sell a medicine (a patent term extension) or by delays encountered during patent prosecution that are caused by the United States Patent and Trademark Office (the “USPTO”) (referred to as patent term adjustment).
+Added: For example, the Hatch-Waxman Act permits a patent term extension for FDA-approved medicines of up to five years beyond the expiration of the patent.
+Added: The length of the patent term extension is related to the length of time the medicine is under regulatory review and diligence during the review process.
+Added: Patent term extensions cannot extend the remaining term of a patent beyond a total of 14 years from the date of product approval and only one patent covering an approved medicine or its method of use may be extended.
+Added: A similar kind of patent extension, referred to as a Supplementary Protection Certificate, is available in Europe.
+Added: Legal frameworks are also available in certain other jurisdictions to extend the term of a patent.
+Added: We currently intend to seek patent term extensions on any of our issued patents in any jurisdiction where we have a qualifying patent and the extension is available;
+Added: however there is no guarantee that the applicable regulatory authorities, including the FDA in the United States, will agree with our assessment of whether such extensions should be granted, and even if granted, the length of such extensions.
+Added: Further, even if our patent is extended, the patent, including the extended portion of the patent, may be held invalid or unenforceable by a court of final jurisdiction in the United States or a foreign country.
+Added: As with other biotechnology and pharmaceutical companies, our ability to obtain and maintain a proprietary position on our product candidates and technologies will depend on our success in obtaining effective patent claims on these pending patents and enforcing those claims if granted.
+Added: However, our pending patent applications, and any patent applications that we may in the future
+Added: file or license from third parties, may not result in the issuance of patents.
+Added: We also cannot predict the breadth of claims that may be allowed or enforced in our patents.
+Added: Furthermore, our competitors may be able to independently develop and commercialize products with similar mechanisms of action and duplicate our methods of treatments or strategies without infringing our patents.
+Added: Because of the extensive time required for clinical development and regulatory review of a therapeutic product we may develop, it is possible that, before any of our products can be commercialized, any related patent may expire or remain in force for only a short period following commercialization, thereby reducing any advantage of any such patent.
+Added: Moreover, even our issued patents do not guarantee us the right to practice our technology in relation to the commercialization of our clinical candidates.
+Added: The area of patent and other intellectual property rights in pharmaceuticals is an evolving one with many risks and uncertainties, and third parties may have blocking patents that could be used to prevent us from commercializing our clinical candidates.
+Added: The biotechnology and pharmaceutical industries are characterized by extensive litigation regarding patents and other intellectual property rights.
+Added: Our ability to obtain and maintain our proprietary position for our product candidates and technology will depend on our success in enforcing the claims that have been granted or may grant.
+Added: However, any of our patents, including patents that we may rely on to protect our market for approved therapeutics, may be held invalid or unenforceable by a court of final jurisdiction.
+Added: Alternatively, we may decide that it is in our interest to settle a litigation in a manner that affects the term or enforceability of our patent.
+Added: Changes in either the patent laws or in interpretations of patent laws in the United States and other countries may diminish our ability to protect our inventions and enforce our intellectual property rights.
+Added: Accordingly, we cannot predict the breadth or enforceability of claims that have been or may be granted in our patents or in third-party patents.
+Added: Trade secrets
+Added: In addition to patents, we rely upon unpatented trade secrets and know-how and continuing technological innovation to develop and maintain our competitive position.
+Added: We seek to protect our proprietary information, in part, using confidentiality agreements with our commercial partners, collaborators, employees, and consultants, and invention assignment agreements with our employees.
+Added: These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party.
+Added: These agreements may be breached, and we may not have adequate remedies for any breach.
+Added: In addition, our trade secrets may otherwise become known or be independently discovered by competitors.
+Added: To the extent that our commercial partners, collaborators, employees, and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.
+Added: Government regulation
+Added: In the United States, biological products, including cell-based regenerative therapy products, are subject to regulation under the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”), the Public Health Service Act (the “PHS Act”) and other federal, state, local and foreign statutes and regulations.
+Added: Both the FD&C Act and the PHS Act and their corresponding regulations govern, among other things, the research, development, clinical trial, testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, advertising and other promotional practices involving biological products.
+Added: Each clinical trial protocol for a cell-based therapy product must be reviewed by the FDA.
+Added: FDA approval must be obtained before the marketing of any biological product.
+Added: The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations requires the expenditure of substantial time and financial resources and we may not be able to obtain the required regulatory approvals.
+Added: Ethical, social and legal concerns about gene or cell-based therapies, genetic testing and genetic research could result in additional laws and regulations restricting or prohibiting the processes we may use.
+Added: Federal and state legislatures, agencies, congressional committees and foreign governments have expressed interest in further regulating biotechnology.
+Added: More restrictive laws and regulations or interpretations of existing laws or regulations, or claims that our product candidates are unsafe or pose a hazard, could prevent us from commercializing any products.
+Added: New government requirements may be established that could delay or prevent regulatory approval of our product candidates under development.
+Added: It is impossible to predict whether legislative changes will be enacted, regulations, policies or guidance changed, or interpretations by agencies or courts changed, or what the impact of such changes, if any, may be.
+Added: biological products development process
+Added: The process required by the FDA before a biological product may be marketed in the United States generally involves the following:
+Added: completion of nonclinical laboratory tests and animal studies according to Good Laboratory Practices (“GLP”), and applicable requirements for the humane use of laboratory animals or other applicable regulations;
+Added: submission to the FDA of an application for an investigational new drug (“IND”) application which must become effective before human clinical trials may begin;
+Added: approval of the protocol and related documentation by an investigational review board (“IRB”) or ethics committee at each clinical trial site before each clinical trial may be initiated;
+Added: performance of adequate and well-controlled human clinical trials according to applicable IND regulations, good clinical practices, or Good Clinical Practices (“GCPs”) and other clinical-trial related regulation, to evaluate the safety and efficacy of the investigational biological product for each proposed indication;
+Added: submission to the FDA of a Biologics License Application (“BLA”) for marketing approval that includes sufficient evidence of establishing the safety, purity, and potency of the proposed biological product for each proposed indication, including from results of nonclinical testing and clinical trials;
+Added: satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with cGMP to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, compliance with the FDA’s current Good Tissue Practices (“cGTPs”) for the use of human cellular and tissue products;
+Added: potential FDA audit of the nonclinical study and clinical trial sites to assure compliance with GLP and GCP and the integrity of the clinical data submitted in support of the BLA;
+Added: review of the product candidate by an FDA advisory committee, where appropriate or if applicable;
+Added: payment of user fees for FDA review of the BLA (unless a fee waiver applies);
+Added: FDA review and approval, or licensure, of the BLA.
+Added: Preclinical Testing
+Added: Before testing any biological product candidate, including a cell-based regenerative therapy product, in humans, the product candidate enters the preclinical testing stage.
+Added: Preclinical tests, also referred to as nonclinical studies, include laboratory evaluations of a product candidate’s biological characteristics, chemistry, toxicity, stability and formulation, as well as animal studies to assess the potential safety and activity of the product candidate.
+Added: The sponsor must submit the results of the preclinical studies, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.
+Added: An IND is a request for authorization from the FDA to administer an investigational product to humans and must become effective before human clinical trials may begin.
+Added: The Consolidated Appropriations Act for 2023, signed into law on December 29, 2022, (P.L.
+Added: 117-328) amended the Federal Food, Drug, and Cosmetic Act (the “FDCA”) and the Public Health Service Act to specify that nonclinical testing for drugs and biologics may, but is not required to, include in vivo animal testing.
+Added: According to the amended language, a sponsor may fulfill nonclinical testing requirements by completing various in vitro assays (e.g., cell-based assays, organ chips, or microphysiological systems), in silico studies (i.e., computer modeling), other human or nonhuman biology-based tests (e.g., bioprinting), or in vivo animal tests.
+Added: The conduct of the preclinical tests must comply with federal regulations and requirements including GLP.
+Added: Some long-term preclinical testing, such as animal tests of reproductive adverse events and carcinogenicity, may continue after an IND for an investigational drug candidate is submitted to the FDA and human clinical trials have been initiated.
+Added: Human clinical trials in support of a BLA
+Added: Clinical trials involve the administration of the product candidate to human subjects under the supervision of qualified investigators and in accordance with GCP requirements and protocols detailing the objectives of the study, the parameters to be used in monitoring the safety and effectiveness criteria to be evaluated.
+Added: Each protocol must be submitted to the FDA as part of the IND.
+Added: Study subjects must sign an informed consent form before participating in a clinical trial.
+Added: There are also requirements governing the reporting of on-going clinical trials and clinical trial results to public registries.
+Added: An IND provides an exemption from the FD&C Act that allows an unapproved product candidate to be shipped in interstate commerce for use in an investigational clinical trial and is also a request for FDA authorization to administer such investigational product to humans.
+Added: Such authorization must be secured prior to interstate shipment and administration of any biologic product candidate that is not the subject of an approved BLA.
+Added: In support of a request for an IND, an applicant must submit a protocol for each clinical trial and any subsequent protocol amendments must be submitted to the FDA as part of the IND.
+Added: In addition, the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and plans for clinical trials, among other things, must be submitted to the FDA as part of an IND.
+Added: The FDA requires a 30-day waiting period after the filing of each IND before clinical trials may begin.
+Added: This waiting period is designed to allow the FDA to review the IND to determine whether human research subjects will be exposed to unreasonable health risks.
+Added: An IND automatically becomes effective 30 days after receipt by the FDA, unless before that time the FDA issues a notice expressly authorizing the proposed trial to proceed or raises concerns or questions related to one or more proposed clinical trials and places the clinical trial on a clinical hold.
+Added: If FDA raises concerns or places the trial on clinical hold, the IND sponsor and the agency must resolve any outstanding concerns before the proposed trials can begin.
+Added: As a result, submission of an IND may not result in the FDA allowing clinical trials to commence.
+Added: Following commencement of a clinical trial, the FDA may also place a clinical hold or partial clinical hold on that trial.
+Added: A clinical hold is an order issued by the FDA to the sponsor to delay a proposed clinical investigation or to suspend an ongoing investigation.
+Added: A partial clinical hold is a delay or suspension of only part of the clinical work requested under the IND.
+Added: No more than 30 days after imposition of a clinical hold or partial clinical hold, the FDA will provide the sponsor a written explanation of the basis for the hold.
+Added: Following issuance of a clinical hold or partial clinical hold, an investigation may only resume after the FDA has notified the sponsor that the investigation may proceed.
+Added: A sponsor may choose, but is not required, to conduct a foreign clinical trial under an IND.
+Added: When a foreign clinical trial is conducted under an IND, all FDA IND requirements must be met unless waived.
+Added: When a foreign clinical trial is not conducted under an IND, the sponsor must ensure that the study complies with certain regulatory requirements of the FDA in order to use the study as support for an IND or application for marketing approval or licensing.
+Added: In particular, such studies must be conducted in accordance with GCP, including review and approval by an independent ethics committee (an “IEC”) and informed consent from subjects and must meet other clinical trial requirements, such as sufficient patient population size and statistical powering.
+Added: The FDA must be able to validate the data through an onsite inspection, if deemed necessary by the FDA.
+Added: An IRB representing each institution participating in the clinical trial must review and approve the plan for any clinical trial before it commences at that institution, and the IRB must conduct continuing review and reapprove the study at least annually.
+Added: The IRB must review and approve, among other things, the study protocol and informed consent information to be provided to study subjects.
+Added: An IRB must operate in compliance with FDA regulations.
+Added: An IRB can suspend or terminate approval of a clinical trial at its institution, or an institution it represents, if the clinical trial is not being conducted in accordance with the IRB’s requirements or if the product candidate has been associated with unexpected serious harm to patients.
+Added: Some trials are overseen by an independent group of qualified experts organized by the trial sponsor, known as a Data Safety Monitoring Board (“DSMB”).
+Added: This group provides authorization as to whether or not a trial may move forward at designated check points based on access that only the group maintains to available data from the study.
+Added: Information about certain clinical trials, including details of the protocol and eventually study results, also must be submitted within specific timeframes to the National Institutes of Health for public dissemination on the ClinicalTrials.gov data registry.
+Added: Information related to the product, patient population, phase of investigation, study sites and investigators and other aspects of the clinical trial is made public as part of the registration of the clinical trial.
+Added: Sponsors are also obligated to disclose the results of their clinical trials after completion.
+Added: Disclosure of the results of these trials can be delayed in some cases for up to two years after the date of completion of the trial.
+Added: Failure to timely register a covered clinical study or to submit study results as provided for in the law can give rise to civil monetary penalties and also prevent the non-compliant party from receiving future grant funds from the federal government.
+Added: The National Institutes of Health’s (“NIH’s”) Final Rule on ClinicalTrials.gov registration and reporting requirements became effective in 2017, and both NIH and FDA have brought enforcement actions against non-compliant clinical trial sponsors.
+Added: Clinical trials typically are conducted in three sequential phases that may overlap or be combined:
+Added: The product candidate is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.
+Added: In the case of some product candidates for severe or life-threatening diseases, especially when the product candidate may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients.
+Added: The product candidate is evaluated in a limited patient population to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product candidate for specific targeted diseases and to determine dosage tolerance, optimal dosage and dosing schedule.
+Added: Clinical trials are undertaken to further evaluate dosage, clinical efficacy, potency, and safety in an expanded patient population at geographically dispersed clinical trial sites.
+Added: These clinical trials are intended to establish the overall risk/benefit ratio of the product candidate and provide, if appropriate, an adequate basis for approval and product labeling.
+Added: These trials may include comparisons with placebo and/or other comparator treatments.
+Added: The duration of treatment is often extended to mimic the actual use of a product during marketing.
+Added: Post-approval clinical trials, sometimes referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.
+Added: These clinical trials are used to gain additional experience from the treatment of patients in the intended therapeutic indication, particularly for long-term safety follow-up.
+Added: In certain instances, the FDA may mandate the performance of Phase 4 clinical trials as a condition of approval of a BLA.
+Added: In the Consolidated Appropriations Act for 2023, Congress amended the FDCA to require sponsors of a Phase 3 clinical trial, or other “pivotal study”
+Added: of a new drug to support marketing authorization, to submit a diversity action plan for such clinical trial.
+Added: The action plan must include the sponsor’s diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.
+Added: A sponsor must submit a diversity action plan to FDA by the time the sponsor submits the trial protocol to the agency for review.
+Added: The FDA may grant a waiver for some or all of the requirements for a diversity action plan.
+Added: unknown at this time how the diversity action plan may affect Phase 3 trial planning and timing or what specific information FDA will expect in such plans, but if FDA objects to a sponsor’s diversity action plan and requires the sponsor to amend the plan or take other actions, it may delay trial initiation.
+Added: During all phases of clinical development, regulatory agencies require extensive monitoring and auditing of all clinical activities, clinical data, and clinical trial investigators.
+Added: Annual progress reports detailing the results of the clinical trials must be submitted to the FDA.
+Added: Written IND safety reports must be promptly submitted to the FDA, the responsible IRBs and the investigators for serious and unexpected adverse events, any findings from other studies, tests in laboratory animals or in vitro testing that suggest a significant risk for human subjects, or any clinically important increase in the rate of a serious suspected adverse reaction over that listed in the protocol or investigator brochure.
+Added: The sponsor must submit an IND safety report within 15 calendar days after the sponsor determines that the information qualifies for reporting.
+Added: The sponsor also must notify the FDA of any unexpected fatal or life-threatening suspected adverse reaction within seven calendar days after the sponsor’s initial receipt of such information.
+Added: Phase 1, Phase 2 and Phase 3 clinical trials may not be completed successfully within any specified period, if at all.
+Added: Human cell-based products administered directly into kidney tissue are a new category of therapeutics.
+Added: Because this is a relatively new and expanding area of novel therapeutic interventions, there can be no assurance as to the length of the study period, the number of patients the FDA will require to be enrolled in the studies in order to establish the safety, purity and potency of human cell-based therapy products, or that the data generated in these studies will be acceptable to the FDA to support marketing approval.
+Added: Concurrent with clinical trials, companies usually complete additional animal studies and also must develop additional information about the physical characteristics of the biological product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
+Added: To help reduce the risk of the introduction of adventitious agents with use of biological products, the PHS Act emphasizes the importance of manufacturing control for products whose attributes cannot be precisely defined.
+Added: The manufacturing process must be capable of consistently producing quality batches of the product candidate and, among other things, the sponsor must develop methods for testing the identity, strength, quality, potency and purity of the final biological product.
+Added: Additionally, appropriate packaging must be selected and tested and stability studies must be conducted to demonstrate that the biological product candidate does not undergo unacceptable deterioration over its shelf life.
+Added: review and approval processes
+Added: After the completion of clinical trials of a biological product candidate, FDA approval of a BLA must be obtained before commercial marketing of the biological product.
+Added: The BLA must include results of product development, laboratory and animal studies, human studies, information on the manufacture and composition of the product, proposed labeling and other relevant information.
+Added: To support marketing approval, the data submitted must be sufficient in quality and quantity to establish the safety, purity, potency and efficacy of the investigational product for its proposed indication or indications to the satisfaction of the FDA.
+Added: The testing and approval processes require substantial time and effort and there can be no assurance that the FDA will accept the BLA for filing and, even if filed, that any approval will be granted on a timely basis, if at all.
+Added: Under the Prescription Drug User Fee Act, as amended (the “PDUFA”), each BLA must be accompanied by a significant user fee.
+Added: The FDA adjusts the PDUFA user fees on an annual basis.
+Added: PDUFA also imposes an annual program fee for registered biologic product manufacturers.
+Added: Fee waivers or reductions are available in certain circumstances, including a waiver of the application fee for the first application filed by a small business.
+Added: Within 60 days following submission of the application, the FDA reviews a BLA submitted to determine if it is substantially complete before the FDA accepts it for filing.
+Added: The FDA may refuse to file any BLA that it deems incomplete or not properly reviewable at the time of submission and may request additional information.
+Added: In this event, the BLA must be resubmitted with the additional information.
+Added: The resubmitted application also is subject to review before the FDA accepts it for filing.
+Added: Once the submission is accepted for filing, the FDA begins an in-depth substantive review of the BLA.
+Added: The FDA reviews the BLA to determine, among other things, whether the proposed product is safe, pure, potent and effective for its proposed indication or indications and whether the product is being manufactured in accordance with cGMP to ensure the continued safety, purity and potency of such product.
+Added: Under the performance goals and policies implemented by the FDA under PDUFA, for original BLAs, the FDA targets 10 months from the filing date in which to complete its initial review of a standard application and respond to the applicant, and six months from the filing date for an application with priority review.
+Added: The FDA does not always meet its PDUFA goal dates, and the review process is often significantly extended due to FDA requests for additional information or clarification.
+Added: The review process and the PDUFA goal date may be extended by the FDA for three additional months to consider new information or in the case of a clarification provided by the applicant to address an outstanding deficiency identified by the FDA following the original submission.
+Added: Before approving a BLA, the FDA typically will inspect the facilities at which the product is manufactured.
+Added: The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.
+Added: For a cell-based therapy product, the FDA also will not approve the product if the manufacturer is not in compliance with the cGTPs.
+Added: These are FDA regulations that govern the methods used in, and the facilities and controls used for, the manufacture of human cells, tissues, and cellular and tissue-based products (“HCT/ Ps”), which are human cells or tissue intended for implantation, transplant, infusion, or transfer into a human recipient.
+Added: The primary intent of the cGTP requirements is to ensure that cell and tissue-based products are manufactured in a manner designed to prevent the introduction, transmission and spread of communicable disease.
+Added: FDA regulations also require tissue establishments to register and list their HCT/Ps with the FDA and, when applicable, to evaluate donors through appropriate screening and testing.
+Added: Additionally, before approving a BLA, the FDA will typically inspect one or more clinical sites to assure that the clinical trials were conducted in compliance with IND study requirements and GCP requirements.
+Added: To assure cGMP, cGTP and GCP compliance, an applicant must incur significant expenditure of time, money and effort in the areas of training, record keeping, production and quality control.
+Added: Additionally, the FDA may refer any BLA, including applications for novel biologic candidates which present difficult questions of safety or efficacy, to an advisory committee.
+Added: Typically, an advisory committee is a panel of independent experts, including clinicians and other scientific experts that reviews, evaluates and provides a recommendation as to whether the application should be approved and under what conditions.
+Added: The FDA is not bound by the recommendation of an advisory committee, but it considers such recommendations when making final decisions on approval.
+Added: The FDA likely will re-analyze the clinical trial data, which could result in extensive discussions between the FDA and the applicant during the review process.
+Added: The FDA also may require submission of a Risk Evaluation and Mitigation Strategy (“REMS”) if it determines that a REMS is necessary to ensure that the benefits of the medicine outweigh its risks and to assure the safe use of the medicine or biological product.
+Added: The REMS could include medication guides, physician communication plans, assessment plans and/or elements to assure safe use, such as restricted distribution methods, patient registries or other risk minimization tools.
+Added: The FDA determines the requirement for a REMS, as well as the specific REMS provisions, on a case-by-case basis.
+Added: If the FDA concludes a REMS is needed, the sponsor of the BLA must submit a proposed REMS.
+Added: The FDA will not approve a BLA without a REMS, if required.
+Added: Under the Pediatric Research Equity Act (“PREA”), a BLA or supplement to a BLA for a novel product (e.g., new active ingredient, new indication, etc.) must contain data to assess the safety and effectiveness of the biological product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.
+Added: The FDA may grant deferrals for submission of data or full or partial waivers.
+Added: The PREA requires a sponsor who is planning to submit a marketing application for a product that includes a new active ingredient, new indication, new dosage form, new dosing regimen or new route of administration to submit an initial Pediatric Study Pla n (“PSP”), within 60 days of an end-of-Phase 2 meeting or, if there is no such meeting, as early as practicable before the initiation of the Phase 3 or Phase 2/3 clinical trial.
+Added: The initial PSP must include an outline of the pediatric study or studies that the sponsor plans to conduct, including trial objectives and design, age groups, relevant endpoints and statistical approach, or a justification for not including such detailed information, and any request for a deferral of pediatric assessments or a full or partial waiver of the requirement to provide data from pediatric studies along with supporting information.
+Added: The FDA and the sponsor must reach an agreement on the PSP.
+Added: A sponsor can submit amendments to an agreed upon initial PSP at any time if changes to the pediatric plan need to be considered based on data collected from pre-clinical studies, early phase clinical trials or other clinical development programs.
+Added: The FDA reviews a BLA to determine, among other things whether the product is safe, pure and potent and the facility in which it is manufactured, processed, packed or held meets standards designed to assure the product’s continued safety, purity and potency.
+Added: The approval process is lengthy and often difficult, and the FDA may refuse to approve a BLA if the applicable regulatory criteria are not satisfied or may require additional clinical or other data and information.
+Added: On the basis of the FDA’s evaluation of the BLA and accompanying information, including the results of the inspection of the manufacturing facilities, the FDA may issue either an approval letter or a Complete Response Letter (“CRL”).
+Added: An approval letter authorizes commercial marketing of the product with specific prescribing information for specific indications.
+Added: A CRL indicates that the review cycle of the application is complete, and the application will not be approved in its present form.
+Added: A CRL generally outlines the deficiencies in the submission and may require substantial additional testing or information in order for the FDA to reconsider the application.
+Added: The CRL may require additional clinical or other data, additional pivotal Phase 3 clinical trial(s) and/or other significant and time-consuming requirements related to clinical trials, preclinical studies or manufacturing.
+Added: If a CRL is issued, the applicant may choose to either resubmit the BLA addressing all of the deficiencies identified in the letter, or withdraw the application.
+Added: If and when those deficiencies have been addressed to the FDA’s satisfaction in a resubmission of the BLA, the FDA will issue an approval letter.
+Added: The FDA has committed to reviewing such resubmissions in response to an issued CRL in either two or six months depending on the type of information included.
+Added: Even with the submission of this additional information, however, the FDA ultimately may decide that the application does not satisfy the regulatory criteria for approval.
+Added: If a product receives regulatory approval from the FDA, the approval is limited to the conditions of use (e.g., patient population, indication) described in the application.
+Added: Further, depending on the specific risk(s) to be addressed, the FDA may require that contraindications, warnings or precautions be included in the product labeling, require that post-approval trials,
+Added: including Phase 4 clinical trials, be conducted to further assess a product’s safety after approval, require testing and surveillance programs to monitor the product after commercialization, or impose other conditions, including distribution and use restrictions or other risk management mechanisms under a REMS, which can materially affect the potential market and profitability of the product.
+Added: The FDA may prevent or limit further marketing of a product based on the results of post-marketing trials or surveillance programs.
+Added: After approval, some types of changes to the approved product, such as adding new indications, manufacturing changes and additional labeling claims, are subject to further testing requirements and FDA review and approval.
+Added: Fast Track, RMAT and Priority Review Designations
+Added: The FDA has various programs, including Fast Track designation, RMAT designation and priority review, that are intended to expedite or simplify the process for the development or FDA review of medicines and biologics that are intended for the treatment of serious or life-threatening diseases or conditions.
+Added: These programs do not change the standards for approval but may help expedite the development or approval process.
+Added: To be eligible for fast-track designation, the FDA must determine, based on the request of a sponsor, that a new medicine or biological product is intended to treat a serious or life-threatening condition and demonstrates the potential to address an unmet medical need by providing a therapy where none exists or a therapy that may be potentially superior to existing therapy based on efficacy or safety factors.
+Added: Fast track designation provides opportunities for more frequent interactions with the FDA review team to expedite development and review of the product.
+Added: The FDA may also review sections of the NDA or BLA for a fast track product on a rolling basis before the complete application is submitted, if the sponsor and the FDA agree on a schedule for the submission of the application sections and the sponsor pays any required user fees upon submission of the first section of the NDA or BLA.
+Added: In addition, fast track designation may be withdrawn by the sponsor or rescinded by the FDA if the designation is no longer supported by data emerging from the clinical trial process.
+Added: As part of the 21st Century Cures Act (the “Cures Act”), enacted in December 2016, Congress amended the FD&C Act to facilitate an efficient development program for, and expedite review of regenerative medicine advanced therapies, or RMATs, which include cell and gene therapies, therapeutic tissue engineered products, human cell and tissue products, and combination products using any such therapies or products.
+Added: REACT has received RMAT designation from the FDA.
+Added: RMAT designation does not include HCT/Ps regulated solely under section 361 of the PHS Act and 21 Code of Federal Regulations Part 1271.
+Added: This program is intended to facilitate efficient development and expedite review of regenerative medicine therapies that are intended to treat, modify, reverse, or cure a serious or life-threatening disease or condition.
+Added: A sponsor may request that FDA designate a medicine as a RMAT concurrently with or at any time after submission of an IND.
+Added: The FDA has 60 calendar days to determine whether the medicine meets the criteria, including whether there is preliminary clinical evidence indicating that the medicine has the potential to address unmet medical needs for a serious or life- threatening disease or condition.
+Added: A BLA for a regenerative medicine therapy that has received RMAT designation may be eligible for priority review or accelerated approval through use of surrogate or intermediate endpoints reasonably likely to predict long-term clinical benefit, or reliance upon data obtained from a meaningful number of sites.
+Added: Benefits of RMAT designation also include early interactions with FDA to discuss any potential surrogate or intermediate endpoint to be used to support accelerated approval.
+Added: A regenerative medicine therapy with RMAT designation that is granted accelerated approval and is subject to post-approval requirements may fulfill such requirements through the submission of clinical evidence from clinical trials, patient registries, or other sources of real-world evidence, such as electronic health records;
+Added: the collection of larger confirmatory data sets;
+Added: or post-approval monitoring of all patients treated with such therapy prior to its approval.
+Added: Finally, the FDA may designate a product for priority review if it is a medicine or biologic that treats a serious condition and, if approved, would provide a significant improvement in safety or effectiveness.
+Added: The FDA determines at the time that the marketing application is submitted, on a case-by-case basis, whether the proposed medicine represents a significant improvement in treatment, prevention or diagnosis of disease when compared with other available therapies.
+Added: Significant improvement may be illustrated by evidence of increased effectiveness in the treatment of a condition, elimination or substantial reduction of a treatment-limiting reaction, documented enhancement of patient compliance that may lead to improvement in serious outcomes, or evidence of safety and effectiveness in a new subpopulation.
+Added: A priority review designation is intended to direct overall attention and resources to the evaluation of such applications, and to shorten the FDA’s goal for taking action on a marketing application from 10 months to six months for an original BLA or for a New Molecular Entity NDA from the date of filing.
+Added: Even if a product qualifies for one or more of these programs, the FDA may later decide that the product no longer meets the conditions for qualification or decide that the time period for FDA review or approval will not be shortened.
+Added: Furthermore, fast track designation, RMAT therapy designation and priority review do not change the standards for approval and may not ultimately expedite the development or approval process.
+Added: Accelerated approval pathway
+Added: In addition, products studied for their safety and effectiveness in treating serious or life-threatening illnesses and that provide meaningful therapeutic benefit over existing treatments may receive accelerated approval from the FDA and may be approved on
+Added: the basis of adequate and well-controlled clinical trials establishing that the product has an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit.
+Added: The FDA may also grant accelerated approval for such a medicine or biologic when the product has an effect on an intermediate clinical endpoint that can be measured earlier than an effect on irreversible morbidity or mortality (“IMM”), and that is reasonably likely to predict an effect on IMM or other clinical benefit, taking into account the severity, rarity, or prevalence of the condition and the availability or lack of alternative treatments.
+Added: As a condition of approval, the FDA may require that a sponsor of a medicine receiving accelerated approval perform post- marketing clinical trials to verify and describe the predicted effect on IMM or other clinical endpoint, and the product may be subject to expedited withdrawal procedures.
+Added: Drugs and biologics granted accelerated approval must meet the same statutory standards for safety and effectiveness as those granted traditional approval.
+Added: For the purposes of accelerated approval, a surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign, or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit.
+Added: Surrogate endpoints can often be measured more easily or more rapidly than clinical endpoints.
+Added: An intermediate clinical endpoint is a measurement of a therapeutic effect that is considered reasonably likely to predict the clinical benefit of a medicine, such as an effect on IMM.
+Added: The FDA has limited experience with accelerated approvals based on intermediate clinical endpoints but has indicated that such endpoints generally may support accelerated approval when the therapeutic effect measured by the endpoint is not itself a clinical benefit and basis for traditional approval, if there is a basis for concluding that the therapeutic effect is reasonably likely to predict the ultimate long-term clinical benefit of a medicine.
+Added: The accelerated approval pathway is most often used in settings in which the course of a disease is long and an extended period of time is required to measure the intended clinical benefit of a medicine, even if the effect on the surrogate or intermediate clinical endpoint occurs rapidly.
+Added: For example, accelerated approval has been used extensively in the development and approval of medicines for treatment of a variety of cancers in which the goal of therapy is generally to improve survival or decrease morbidity and the duration of the typical disease course requires lengthy and sometimes large clinical trials to demonstrate a clinical or survival benefit.
+Added: The accelerated approval pathway is usually contingent on a sponsor’s agreement to conduct, in a diligent manner, additional post-approval confirmatory studies to verify and describe the medicine’s clinical benefit.
+Added: As a result, a product candidate approved on this basis is subject to rigorous post-marketing compliance requirements, including the completion of Phase 4 or post-approval clinical trials to confirm the effect on the clinical endpoint.
+Added: Failure to conduct required post-approval studies, or to confirm the predicted clinical benefit of the product during post-marketing studies, would allow the FDA to withdraw approval of the medicine.
+Added: As part of the Consolidated Appropriations Act for 2023, Congress provided FDA additional statutory authority to mitigate potential risks to patients from continued marketing of ineffective drugs previously granted accelerated approval.
+Added: Under the act’s amendments to the FDCA, FDA may require the sponsor of a product granted accelerated approval to have a confirmatory trial underway prior to approval.
+Added: The sponsor must also submit progress reports on a confirmatory trial every six months until the trial is complete, and such reports are published on FDA’s website.
+Added: The amendments also give FDA the option of using expedited procedures to withdraw product approval if the sponsor’s confirmatory trial fails to verify the claimed clinical benefits of the product.
+Added: All promotional materials for product candidates being considered and approved under the accelerated approval program are subject to prior review by the FDA.
+Added: Post-approval requirements
+Added: Maintaining substantial compliance with applicable federal, state, and local statutes and regulations requires the expenditure of substantial time and financial resources.
+Added: Following approval of a new product, the manufacturer and the approved product are subject to pervasive and continuing regulation by the FDA, including, among other things, monitoring and recordkeeping activities, reporting of adverse experiences with the product, product sampling and distribution restrictions, complying with promotion and advertising requirements.
+Added: FDA regulations require that products be manufactured in specific approved facilities and in accordance with cGMP.
+Added: The cGMP regulations include requirements relating to organization of personnel, buildings and facilities, equipment, control of components and product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, records and reports and returned or salvaged products.
+Added: We must comply with applicable requirements in the cGMP and cGTP regulations, including quality control and quality assurance and maintenance of records and documentation.
+Added: Entities involved in the manufacture and distribution of approved biologics and HCT/Ps are required to register their establishments with the FDA and certain state agencies, as well as applicable foreign counterparts, and are subject to periodic unannounced inspections by such governmental authorities for compliance with cGMP, cGTP and other laws.
+Added: Accordingly, we must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.
+Added: Future inspections by governmental authorities may identify compliance issues at our facilities that may disrupt production or distribution or require substantial resources to correct.
+Added: In addition, the discovery of conditions that violate these rules, including failure to conform to cGMP or cGTP, could result in enforcement actions, and the discovery of problems with a product after approval may
+Added: result in restrictions on a product, manufacturer or holder of an approved BLA, including voluntary recall and regulatory sanctions as described below.
+Added: Other post-approval requirements applicable to biological products, include reporting of cGMP deviations that may affect the identity, potency, purity and overall safety of a distributed product, record-keeping requirements, reporting of adverse effects, reporting updated safety and efficacy information, and complying with electronic record and signature requirements.
+Added: After a BLA is approved, the product also may be subject to official lot release.
+Added: As part of the manufacturing process, the manufacturer is required to perform certain tests on each lot of the product before it is released for distribution.
+Added: If the product is subject to official release by the FDA, the manufacturer submits samples of each lot of product to the FDA together with a release protocol showing a summary of the history of manufacture of the lot and the results of all of the manufacturer’s tests performed on the lot.
+Added: The FDA also may perform certain confirmatory tests on lots of some products, such as viral vaccines, before releasing the lots for distribution by the manufacturer.
+Added: In addition, the FDA conducts laboratory research related to the regulatory standards on the safety, purity, potency, and effectiveness of biological products.
+Added: We also must comply with the FDA’s advertising and promotion requirements, such as those related to direct-to-consumer advertising, industry-sponsored scientific and educational activities, and promotional activities involving the internet, as well as the prohibition on promoting products for uses or in patient populations that are not described in the product’s approved labeling (known as “off-label use”).
+Added: Although physicians may prescribe legally available products for off-label uses, manufacturers may not market or promote such uses.
+Added: The FDA and other agencies actively enforce the laws and regulations prohibiting the promotion of off-label uses, and a company that is found to have improperly promoted off-label uses may be subject to significant liability.
+Added: If there are any modifications to the product, including changes in indications, labeling or manufacturing processes or facilities, the applicant may be required to submit and obtain FDA approval of a new BLA or a BLA supplement, which may require the applicant to develop additional data or conduct additional pre-clinical studies and clinical trials.
+Added: The FDA may also place other conditions on approvals including the requirement for a REMS to assure the safe use of the product.
+Added: A REMS could include medication guides, physician communication plans or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
+Added: Any of these limitations on approval or marketing could restrict the commercial promotion, distribution, prescription or dispensing of products.
+Added: Product approvals may be withdrawn for non-compliance with regulatory standards or if problems occur following initial marketing.
+Added: Once an approval or clearance of a medicine is granted, the FDA may withdraw the approval if compliance with regulatory requirements and standards is not maintained or if problems occur after the product reaches the market.
+Added: Later discovery of previously unknown problems with a product, including adverse events of unanticipated severity or frequency, or with manufacturing processes, or failure to comply with regulatory requirements, may result in mandatory revisions to the approved labeling to add new safety information, imposition of post-market or clinical trials to assess new safety risks, or imposition of distribution or other restrictions under a REMS program.
+Added: Other potential consequences include, among other things:
+Added: restrictions on the marketing or manufacturing of the product, complete withdrawal of the product from the market or product recalls;
+Added: fines, warning letters or other enforcement-related letters or clinical holds on post-approval clinical trials;
+Added: refusal of the FDA to approve pending NDAs/BLAs or supplements to approved NDAs/BLAs, or suspension or revocation of product approvals;
+Added: product seizure or detention, or refusal to permit the import or export of products;
+Added: injunctions or the imposition of civil or criminal penalties;
+Added: consent decrees, corporate integrity agreements, debarment, or exclusion from federal health care programs;
+Added: or mandated modification of promotional materials and labeling and the issuance of corrective information.
+Added: In addition, the distribution of prescription pharmaceutical products is subject to the Prescription Drug Marketing Act, which sets minimum standards for the registration and regulation of pharmaceutical distributors by the states.
+Added: Furthermore, the Drug Supply Chain Security Act (the “DSCSA”) was enacted with the aim of building an electronic system to identify and trace certain prescription medicines distributed in the United States, including most biological products.
+Added: The DSCSA mandates phased-in and resource-intensive obligations for pharmaceutical manufacturers, wholesale distributors, and dispensers over a 10-year period that is expected to culminate in November 2023.
+Added: From time to time, new legislation and regulations may be implemented that could significantly change the statutory provisions governing the approval, manufacturing and marketing of products regulated by the FDA.
+Added: It is impossible to predict whether further legislative or regulatory changes will be enacted, or FDA regulations, guidance or interpretations changed or what the impact of such changes, if any, may be.
+Added: patent term restoration and marketing exclusivity
+Added: Depending upon the timing, duration and specifics of the FDA approval of the use of our product candidates, some of our U.S.
+Added: patents may be eligible for limited patent term extension under the Hatch-Waxman Amendments.
+Added: The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development
+Added: and the FDA regulatory review process.
+Added: However, patent term restoration cannot extend the remaining term of a patent beyond a total of 14 years from the product’s approval date.
+Added: The patent term restoration period is generally one-half the time between the effective date of an IND and the submission date of a BLA plus the time between the submission date of a BLA and the approval of that application.
+Added: Only one patent applicable to an approved biological product is eligible for the extension and the application for the extension must be submitted prior to the expiration of the patent.
+Added: In addition, a patent can only be extended once and only for a single product.
+Added: The USPTO, in consultation with the FDA, reviews and approves the application for any patent term extension or restoration.
+Added: In the future, we may intend to apply for restoration of patent term for one of our patents, if and as applicable, to add patent life beyond its current expiration date, depending on the expected length of the clinical trials and other factors involved in the filing of the relevant BLA.
+Added: A biological product may also obtain pediatric market exclusivity in the United States.
+Added: Pediatric exclusivity is a type of non-patent marketing exclusivity available in the United States and, if granted, it provides for the attachment of an additional six months of marketing protection to the term of any existing regulatory exclusivity or listed patents.
+Added: This six-month exclusivity may be granted if an NDA sponsor submits pediatric data that fairly respond to a Written Request from the FDA for such data.
+Added: The data do not need to show the product to be effective in the pediatric population studied;
+Added: rather, if the clinical trial is deemed to fairly respond to the FDA’s request, the additional protection is granted.
+Added: If reports of requested pediatric studies are submitted to and accepted by the FDA within the statutory time limits, whatever statutory or regulatory periods of exclusivity or patent protection cover the product are extended by six months.
+Added: This is not a patent term extension, but it effectively extends the regulatory period during which the FDA cannot approve another application.
+Added: The issuance of a Written Request does not require the sponsor to undertake the described studies.
+Added: Reference product exclusivity for biological products
+Added: In March 2010, the Patient Protection and Affordable Care Act (the “ACA”) was enacted in the United States and included the Biologics Price Competition and Innovation Act (the “BPCIA”).
+Added: The BPCIA amended the Public Health Service Act (the “PHSA”) to create an abbreviated approval pathway for biological products that are biosimilar to or interchangeable with an FDA-licensed reference biological product.
+Added: To date, the FDA has approved a number of biosimilars, and numerous biosimilars have been approved in Europe.
+Added: The FDA has also issued several guidance documents outlining its approach to reviewing and approving biosimilars and interchangeable biosimilars.
+Added: A biosimilar product is defined as one that is highly similar to a reference product notwithstanding minor differences in clinically inactive components and for which there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity and potency of the product.
+Added: An interchangeable product is a biosimilar product that can be expected to produce the same clinical results as the reference product in any given patient and, for products administered multiple times to an individual, that the product and the reference product may be alternated or switched after one has been previously administered without increasing safety risks or risks of diminished efficacy relative to exclusive use of the reference biological product without such alternation or switch.
+Added: Upon licensure by the FDA, an interchangeable biosimilar may be substituted for the reference product without the intervention of the health care provider who prescribed the reference product.
+Added: The FDA approved the first interchangeable biosimilars, including an interchangeable monoclonal antibody biosimilar, in 2021.
+Added: The biosimilar applicant must demonstrate that the product is biosimilar based on data from (1) analytical studies showing that the biosimilar product is highly similar to the reference product;
+Added: (2) animal studies (including toxicity);
+Added: and (3) one or more clinical studies to demonstrate safety, purity and potency in one or more appropriate conditions of use for which the reference product is approved.
+Added: In addition, the applicant must show that the biosimilar and reference products have the same mechanism of action for the conditions of use on the label, route of administration, dosage and strength, and the production facility must meet standards designed to assure product safety, purity and potency.
+Added: A reference biological product is granted 12 years of data exclusivity from the time of first licensure of the product, and the first approved interchangeable biologic product will be granted an exclusivity period of up to one year after it is first commercially marketed.
+Added: As part of the Consolidated Appropriations Act for 2023, Congress amended the PHSA in order to permit multiple interchangeable products approved on the same day to receive and benefit from this one-year exclusivity period.
+Added: If pediatric studies are performed and accepted by the FDA as responsive to a Written Request, the 12-year exclusivity period will be extended for an additional six months.
+Added: In addition, the FDA will not accept an application for a biosimilar or interchangeable product based on the reference biological product until four years after the date of first licensure of the reference product.
+Added: “First licensure”
+Added: typically means the initial date the particular product at issue was licensed in the United States.
+Added: Date of first licensure does not include the date of licensure of (and a new period of exclusivity is not available for) a supplement for the reference product for a subsequent application filed by the same sponsor or manufacturer of the reference product (or licensor, predecessor in interest or other related entity) for a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device or strength or for a modification to the structure of the biological product that does not result in a change in safety, purity or potency.
+Added: Therefore, one must determine whether a new product includes a modification to the structure of a previously licensed product that results in a change in safety, purity or potency to assess whether the licensure of the new product is a first licensure that triggers its own period of exclusivity.
+Added: subsequent application, if approved, warrants exclusivity as the “first licensure”
+Added: of a biological product is determined on a case-by-case basis with data submitted by the sponsor.
+Added: The BPCIA is complex and is still being interpreted and implemented by the FDA.
+Added: In addition, recent government proposals have sought to reduce the 12-year reference product exclusivity period.
+Added: Other aspects of the BPCIA, some of which may impact the BPCIA exclusivity provisions, have also been the subject of recent litigation.
+Added: As a result, the ultimate impact, implementation and meaning of the BPCIA is subject to significant uncertainty.
+Added: Additional regulation
+Added: In addition to the foregoing, state and federal laws regarding environmental protection and hazardous substances, including the Occupational Safety and Health Act, the Resource Conservancy and Recovery Act and the Toxic Substances Control Act, affect our business.
+Added: These and other laws govern our use, handling and disposal of various biological, chemical and radioactive substances used in, and wastes generated by, our operations.
+Added: If our operations result in contamination of the environment or expose individuals to hazardous substances, we could be liable for damages and governmental fines.
+Added: We believe that we are in material compliance with applicable environmental laws and that continued compliance therewith will not have a material adverse effect on our business.
+Added: We cannot predict, however, how changes in these laws may affect our future operations.
+Added: Furthermore, some countries have enacted or are considering enacting legal restrictions on the import or export of human genetic materials, cells or tissues.
+Added: For example, in China, the Ministry of Science and Technology (“MOST”) and the former Ministry of Health in June 1998 jointly established the Interim Measures for the Administration of Human Genetic Resources in China.
+Added: In July 2015, the MOST issued the Service Guide for the Examination and Approval of Sampling, Collecting, Trading, Exporting Human Genetic Resources, which provides that foreign entities that collect and use patients’
+Added: human genetic resources in clinical trials shall be required to file for an advance approval with the Human Genetic Resources Administration Office (“HGRAO”) through its online system.
+Added: In October 2017, the MOST issued the Circular on Optimizing the Administrative Examination and Approval of Human Genetic Resources, which simplified the approval process for collecting and using human genetic resources for the purpose of seeking marketing authorization of medicines in China.
+Added: In May 2019, the State Council of China issued the Regulation on the Administration of Human Genetic Resources (the “HGR Regulation”), which stipulates the approval requirements pertinent to research collaborations between Chinese and foreign-owned entities.
+Added: Pursuant to this new rule, a new filing system (as opposed to the advance approval approach originally in place) is put in place for international clinical trials using Chinese patients’
+Added: biospecimens at clinical study sites without involving the export of such biospecimens outside of China.
+Added: A notification filing that specifies the type, quantity and usage of the biospecimens, among others, with the HGRAO is required before conducting such clinical trials.
+Added: The collection, use, and outbound transfer of Chinese patients’
+Added: biospecimens in international collaboration for basic scientific research involving export are still subject to the advance approval of the HGRAO.
+Added: In October 2020, the Standing Committee of the National People’s Congress promulgated the China Biosecurity Law, which became effective on April 15, 2021.
+Added: The China Biosecurity Law reaffirms the regulatory requirements stipulated by the HGR Regulation while potentially increasing the administrative fines significantly in cases in which foreign entities are alleged to have collected, preserved or exported Chinese human genetic resources.
+Added: Foreign Corrupt Practices Act
+Added: Foreign Corrupt Practices Act (the “FCPA”), to which we are subject, prohibits corporations and individuals from engaging in certain activities to obtain or retain business or to influence a person working in an official capacity.
+Added: It is illegal to pay, offer to pay or authorize the payment of anything of value to any foreign government official, government staff member, political party or political candidate in an attempt to obtain or retain business or to otherwise influence a person working in an official capacity.
+Added: Government regulation outside of the United States
+Added: In addition to regulations in the United States, we are subject to a variety of regulations in other jurisdictions governing, among other things, research and development, clinical trials, testing, manufacturing, safety, efficacy, labeling, packaging, storage, record keeping, distribution, reporting, advertising and other promotional practices involving biological products as well as authorization and approval of our products.
+Added: Because biologically sourced raw materials are subject to unique contamination risks, their use may be restricted in some countries.
+Added: The requirements and process governing the conduct of clinical trials, product licensing, pricing and reimbursement vary from country to country.
+Added: In all cases, the clinical trials must be conducted in accordance with GCP and the applicable regulatory requirements and the ethical principles that have their origin in the Declaration of Helsinki.
+Added: If we fail to comply with applicable
+Added: foreign regulatory requirements, we may be subject to, among other things, fines, suspension of clinical trials, suspension or withdrawal of regulatory approvals, product recalls, seizure of products, operating restrictions and criminal prosecution.
+Added: European Union clinical trials regulation
+Added: Whether or not we obtain FDA approval for a product, we must obtain the requisite approvals from regulatory authorities in foreign countries prior to the commencement of clinical trials or marketing of the product in those countries.
+Added: Certain countries outside of the United States have a similar process that requires the submission of a clinical trial application much like the IND prior to the commencement of human clinical trials.
+Added: In the European Union, for example, a Clinical Trial Application (“CTA”) must be submitted for each clinical trial to each country’s National Competent Authority (“NCA”) and at least one IEC, much like the FDA and an IRB, respectively.
+Added: Once the CTA is approved in accordance with a country’s requirements, the corresponding clinical trial may proceed.
+Added: Under the current regime (the EU Clinical Trials Directive 2001/20/EC and corresponding national laws) all suspected unexpected serious adverse reactions to the investigated medicine that occur during the clinical trial have to be reported to the NCA and ECs of the Member State where they occurred.
+Added: Under the Clinical Trials Regulation (EU) No 536/2014, which came into effect on January 31, 2022, there is a centralized application procedure where one EU Member State’s competent authority takes the lead in reviewing part I of the application, which contains scientific and medicinal product documentation, and the other national authorities only have limited involvement.
+Added: Part II, which contains the national and patient-level documentation, is assessed individually by each EU Member State.
+Added: Any substantial changes to the trial protocol or other information submitted with the CTA must be notified to or approved by the relevant competent authorities and ethics committees.
+Added: Medicines used in clinical trials must be manufactured in accordance with good manufacturing practices.
+Added: Other national and EU-wide regulatory requirements may also apply.
+Added: Currently, the extent to which clinical trials will be governed by the Clinical Trials Regulation will depend on when the clinical trial is initiated or on the duration of an ongoing trial.
+Added: As of January 2023, all new clinical trials must comply with the Clinical Trials Regulation.
+Added: In addition, any clinical trial that was already under way as of January 1, 2023 and continues for more than 3 years from the day on which the Clinical Trials Regulation becomes applicable (i.e., January 31, 2025), the Clinical Trials Regulation will at that time begin to apply to the clinical trial.
+Added: Medicinal product review and approval in the EEA
+Added: In the European Economic Area (the “EEA”) (comprised of the EU Member States plus Norway, Iceland and Liechtenstein), medicinal products, including advanced therapy medicinal products (“ATMPs”), are subject to extensive pre-and post-market regulation by regulatory authorities at both the EEA and national levels.
+Added: Regulated in accordance with Regulation (EC) No 1394/2007 (the “ATMP Regulation”), ATMPs comprise gene therapy products, somatic cell therapy products and tissue engineered products.
+Added: The CAT (as defined below) designated REACT as a tissue engineered product.
+Added: Gene therapy products deliver genes into the body that lead to a therapeutic, prophylactic or diagnostic effect.
+Added: We anticipate that REACT will be regulated as an ATMP in the EEA.
+Added: To obtain regulatory approval of an ATMP under EEA regulatory systems, we must submit a marketing authorization application (“MAA”) under the centralized procedure administered by the EMA.
+Added: The application used to submit the BLA in the United States is similar to the required application process in the European Union, with the exception of, among other things, certain specific requirements set out in the ATMP Regulation, for example certain additional product characteristic information that must be included in the MAA.
+Added: The centralized procedure provides for the grant of a single marketing authorization by the European Commission that is valid across all of the EEA.
+Added: As provided for in the ATMP Regulation, the scientific evaluation of MAAs for ATMPs is primarily performed by a specialized scientific committee called the Committee for Advanced Therapies (the “CAT”).
+Added: The CAT prepares a draft opinion on the quality, safety and efficacy of the ATMP which is the subject of the MAA, which is sent for final approval to the Committee for Medicinal Products for Human Use (the “CHMP”).
+Added: The CHMP recommendation is then sent to the European Commission, which adopts a decision binding in all EEA Member States.
+Added: The maximum timeframe for the evaluation of a MAA for an ATMP is 210 days from receipt of a valid MAA, excluding clock stops when additional information or written or oral explanation is to be provided by the applicant in response to questions of the CAT and/or CHMP.
+Added: Clock stops may extend the timeframe of evaluation of a MAA considerably beyond 210 days.
+Added: Where the CHMP gives a positive opinion, the EMA provides the opinion together with supporting documentation to the European Commission, which makes and issues the final decision to grant a marketing authorization within 67 days of receipt of the EMA’s recommendation.
+Added: Accelerated assessment may be granted by the CHMP in exceptional cases, when a medicinal product is of major interest from the point of view of public health and, in particular, from the viewpoint of therapeutic innovation.
+Added: If the CHMP accepts such a request, the timeframe of 210 days for assessment will be reduced to 150 days (excluding clock stops), but it is possible that the CHMP may revert to the standard time limit for the centralized procedure if it determines that the application is no longer appropriate to conduct an accelerated assessment.
+Added: Because the United Kingdom (which comprises Great Britain and Northern Ireland) left the European Union, Great Britain will no longer be covered by centralized marketing authorizations (under the Northern Ireland Protocol, centralized marketing
+Added: authorizations will continue to be recognized in Northern Ireland).
+Added: All medicinal products with a current centralized marketing authorization were automatically converted to Great Britain marketing authorizations on January, 1 2021.
+Added: For a period of two years from January 1, 2021, the Medicines and Healthcare products Regulatory Agency (the “MHRA”), the UK medicines regulator, may rely on a decision taken by the European Commission on the approval of a new marketing authorization in the centralized procedure, in order to more quickly grant a new Great Britain marketing authorization.
+Added: A separate application will, however, still be required.
+Added: Data and marketing exclusivity
+Added: The EEA also provides opportunities for market exclusivity.
+Added: Upon receiving marketing authorization in the EEA, innovative medicinal products generally receive eight years of data exclusivity and an additional two years of market exclusivity.
+Added: If granted, data exclusivity prevents generic or biosimilar applicants from referencing the innovator’s preclinical and clinical trial data contained in the dossier of the reference product when applying for a generic or biosimilar marketing authorization during a period of eight years from the date on which the reference product was first authorized in the EEA.
+Added: During the additional two-year period of market exclusivity, a generic or biosimilar marketing authorization can be submitted, and the innovator’s data may be referenced, but no generic or biosimilar product can be marketed until the expiration of the market exclusivity period.
+Added: The overall ten-year period will be extended to a maximum of eleven years if, during the first eight years of those ten years, the marketing authorization holder obtains an authorization for one or more new therapeutic indications which, during the scientific evaluation prior to authorization, is held to bring a significant clinical benefit in comparison with existing therapies.
+Added: Even if an innovative medicinal product gains the prescribed period of data exclusivity, another company may market another version of the product if such company obtained marketing authorization based on a MAA with a complete independent data package of pharmaceutical tests, preclinical tests and clinical trials.
+Added: There is, however, no guarantee that a product will be considered by the European Union’s regulatory authorities to be an innovative medicinal product, and products may therefore not qualify for data exclusivity.
+Added: Post-approval controls
+Added: Following approval, the holder of the marketing authorization is required to comply with a range of requirements applicable to the manufacturing, marketing, promotion and sale of the medicinal product.
+Added: These include the following:
+Added: The holder of a marketing authorization must establish and maintain a pharmacovigilance system and appoint an individual qualified person for pharmacovigilance, who is responsible for oversight of that
+Added: Key obligations include expedited reporting of suspected serious adverse reactions and submission of periodic safety update reports (“PSURs”).
+Added: All new MAAs must include a risk management plan (“RMP”), describing the risk management system that the company will put in place and documenting measures to prevent or minimize the risks associated with the product.
+Added: The regulatory authorities may also impose specific obligations as a condition of the marketing authorization.
+Added: Such risk-minimization measures or post-authorization obligations may include additional safety monitoring, more frequent submission of PSURs, or the conduct of additional clinical trials or post-authorization safety studies.
+Added: RMPs and PSURs are routinely available to third parties requesting access, subject to limited redactions.
+Added: All advertising and promotional activities for the product must be consistent with the approved Summary of Product Characteristics (“SmPC”), and therefore all off-label promotion is prohibited.
+Added: Direct-to-consumer advertising of prescription medicines is also prohibited in the European Union.
+Added: Although general requirements for advertising and promotion of medicinal products are established under EU directives, the details are governed by regulations in each EU Member State and can differ from one country to another.
+Added: Failure to comply with European Union and EU Member State laws that apply to the conduct of clinical trials, manufacturing approval, marketing authorization of medicinal products and marketing of such products (both before and after grant of the marketing authorization), manufacturing of pharmaceutical products, statutory health insurance, bribery and anti-corruption or with other applicable regulatory requirements may result in administrative, civil or criminal penalties.
+Added: Such penalties could include delays or refusal to authorize the conduct of clinical trials or to grant the marketing authorization, product withdrawals and recalls, product seizures, suspension, withdrawal or variation of the marketing authorization, total or partial suspension of production, distribution, manufacturing or clinical trials, operating restrictions, injunctions, suspension of licenses, fines and criminal penalties.
+Added: Brexit and the Regulatory Framework in the United Kingdom
+Added: As of January 1, 2021, EU law no longer directly applies in the United Kingdom.
+Added: The United Kingdom has adopted existing EU medicines regulation as standalone UK legislation with some amendments to reflect procedural and other requirements with respect to marketing authorizations and other regulatory provisions.
+Added: In order to market medicines in the United Kingdom, manufacturers must hold a UK authorization.
+Added: On January 1, 2021, all EU marketing authorizations were converted to UK marketing authorizations subject to a manufacturer opt-out.
+Added: UK medicines legislation
+Added: is subject to future regulatory change under the Medicines and Medical Devices Act 2021, which sets out a framework for the adoption of medicines regulation.
+Added: Guidance issued by the Medicines and Healthcare products Regulatory Agency, or MHRA, states that the United Kingdom will have the power to take into account marketing authorizations made under the EU decentralized and mutual recognition procedures.
+Added: In addition, the MHRA’s guidance has been updated to refer to new national licensing procedures including new routes of evaluation for novel and biotechnological products.
+Added: Different rules will apply in Northern Ireland following implementation of the Northern Ireland Protocol.
+Added: In Northern Ireland, EU central marketing applications will continue to apply.
+Added: The Trade and Cooperation Agreement between the European Union and the United Kingdom contains an Annex in relation to medicinal products with the objective of facilitating availability of medicines, promotion of public health and consumer protection in respect of medicinal products.
+Added: The Annex provides for mutual recognition of good manufacturing practice (GMP) inspections and certificates, meaning that manufacturing facilities do not need to undergo duplicate inspections for the two markets.
+Added: The Annex establishes a Working Group on Medicinal Products to deal with matters under the Trade and Cooperation Agreement, facilitate co-operation and for the carrying out of technical discussions.
+Added: It is expected that further bilateral discussions will continue with respect to regulatory areas not the subject of the Trade and Cooperation Agreement, including pharmacovigilance.
+Added: The Trade and Cooperation Agreement also does not include reciprocal arrangements for the recognition of batch testing certification.
+Added: However, the United Kingdom has listed approved countries, including the EEA which will enable UK importers and wholesales to recognize certain certification and regulatory standards.
+Added: The European Commission has not adopted such recognition procedures.
+Added: Relatedly, following the United Kingdom’s withdrawal from the EU, the General Data Protection Regulation (“GDPR”) has been implemented in the United Kingdom (as the UK GDPR).
+Added: The UK GDPR sits alongside the UK Data Protection Act 2018 which implements certain derogations in the EU GDPR into United Kingdom law.
+Added: Under the UK GDPR, companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the United Kingdom, or to monitor their behavior will be subject to the UK GDPR –
+Added: the requirements of which are (at this time) largely aligned with those under the EU GDPR and as such, may lead to similar compliance and operational costs with potential fines of up to £17.5 million or 4% of global turnover.
+Added: On June 28, 2021, the European Commission issued a decision that the United Kingdom ensures an adequate level of protection for personal data transferred under the EU GDPR from the European Union to the United Kingdom.
+Added: In 2022, the UK government proposed and debated the Data Protection and Digital Information Bill to harmonize the 2018 Data Protection Act, UK GDPR, and the Privacy and Electronic Communications Regulations under one legislative framework.
+Added: However, progress on the bill stalled as the government continues to assess the most optimal approach to data protection reform.
+Added: Other health care laws and compliance requirements
+Added: If our product candidates are approved in the United States, we will have to comply with various U.S.
+Added: federal and state laws, rules and regulations pertaining to health care fraud and abuse, including anti-kickback laws and false claims laws, rules and regulations.
+Added: Violations of the fraud and abuse laws are punishable by criminal and civil sanctions, including, in some instances, exclusion from participation in federal and state health care programs, including Medicare and Medicaid.
+Added: These laws include:
+Added: the federal Anti-Kickback Statute (the “AKS”), which prohibits, among other things, knowingly and willfully soliciting, receiving, offering or paying any remuneration (including any kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in cash or in kind, to induce, or in return for, either the referral of an individual, or the purchase, lease, order, arrangement or recommendation of any good, facility, item or service for which payment may be made, in whole or in part, under a federal health care program, such as the Medicare and Medicaid programs;
+Added: a person or entity does not need to have actual knowledge of the AKS or specific intent to violate it to have committed a violation.
+Added: In addition, the government may assert that a claim including items or services resulting from a violation of the AKS constitutes a false or fraudulent claim for purposes of the federal False Claims Act (the “FCA”) or federal civil money penalties statute;
+Added: the federal civil and criminal false claims laws and civil monetary penalty laws, including the FCA, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to, or approval by Medicare, Medicaid, or other federal health care programs, knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim or an obligation to pay or transmit money to the federal government, or knowingly concealing or knowingly and improperly avoiding or decreasing or concealing an obligation to pay money to the federal government.
+Added: Manufacturers can be held liable under the FCA even when they do not submit claims directly to government payers if they are deemed to “cause”
+Added: the submission of false or fraudulent claims.
+Added: The FCA also permits a private individual acting as a “whistleblower”
+Added: to bring actions on behalf of the federal government alleging violations of the FCA and to share in any monetary recovery;
+Added: the Civil Monetary Penalties Law (beneficiary inducement law), which prohibits, among other things, the offering or giving of remuneration, which includes, without limitation, any transfer of items or services for free or for less than fair market value (with limited exceptions), to a Medicare or Medicaid beneficiary that the person knows or should know is likely to influence the beneficiary’s selection of a particular supplier of items or services reimbursable by a federal or state governmental program;
+Added: The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created new federal criminal statutes that prohibit knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program, regardless of the payor (e.g., public or private) and knowingly and willfully falsifying, concealing or covering up by any trick or device a material fact or making any materially false, fictitious, or fraudulent statements or representations in connection with the delivery of, or payment for, health care benefits, items or services relating to health care matters;
+Added: similar to the AKS, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;
+Added: the federal transparency requirements under the ACA, including the provision commonly referred to as the Physician Payments Sunshine Act, and its implementing regulations, which requires applicable manufacturers of medicines, devices, biologics and medical supplies for which payment is available under the Medicare, Medicaid or the Children’s Health Insurance Program to report annually to the U.S.
+Added: Department of Health and Human Services (“DHHS”) information related to payments or other transfers of value made to physicians (defined to include doctors, dentists, optometrists, podiatrists and chiropractors), physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, anesthesiologist assistants, certified nurse midwives and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family;
+Added: the FCPA and other anti-corruption laws and regulations pertaining to our financial relationships and interactions with foreign government officials, which prohibit U.S.
+Added: companies and their employees, officers, and representatives from paying, offering to pay, promising, or authorizing the payment of anything of value to any foreign government official (including, potentially, healthcare professionals in countries in which we operate or may sell our products), government staff member, political party, or political candidate to obtain or retain business or to otherwise seek favorable treatment.
+Added: Additionally, we are subject to state and foreign equivalents of each of the health care laws and regulations described above, among others, some of which may be broader in scope and may apply regardless of the payor.
+Added: states have adopted laws similar to the AKS and FCA, and may apply to our business practices, including, but not limited to, research, distribution, sales or marketing arrangements and claims involving health care items or services reimbursed by non-governmental payors, including private insurers.
+Added: In addition, some states have passed laws that require pharmaceutical companies to comply with the April 2003 Office of Inspector General Compliance Program Guidance for Pharmaceutical Manufacturers and/or the Pharmaceutical Research and Manufacturers of America’s Code on Interactions with Health Care Professionals.
+Added: Several states also impose other marketing restrictions or require pharmaceutical companies to make marketing or price disclosures to the state.
+Added: There are ambiguities as to what is required to comply with these state requirements and if we fail to comply with an applicable state law requirement, we could be subject to penalties.
+Added: Because of the breadth of these laws and the narrowness of the statutory exceptions and safe harbors available, it is possible that some of our business activities could be subject to challenge under one or more of such laws.
+Added: Violations of fraud and abuse laws may be punishable by criminal and/or civil sanctions, including penalties, fines, imprisonment and/or exclusion or suspension from federal and state health care programs such as Medicare and Medicaid and debarment from contracting with the U.S.
+Added: In addition, private individuals have the ability to bring actions on behalf of the U.S.
+Added: government under the FCA as well as under the false claims laws of several states.
+Added: Law enforcement authorities are increasingly focused on enforcing health care fraud and abuse laws, and it is possible that some of our practices may be challenged under these laws.
+Added: Efforts to ensure that our current and future business arrangements with third parties, and our business generally, will comply with applicable health care laws and regulations will involve substantial costs.
+Added: If our operations, including our arrangements with physicians and other health care providers are found to be in violation of any of such laws or any other governmental regulations that apply to us, we may be subject to penalties, including, without limitation, administrative, civil and criminal penalties, damages, fines, disgorgement, contractual damages, reputational harm, diminished profits and future earnings, the curtailment or restructuring of our operations, exclusion from participation in federal and state health care programs (such as Medicare and Medicaid), and imprisonment, any of which could adversely affect our ability to operate our business and our financial results.
+Added: The approval and commercialization of any of our product candidates outside the United States will also subject us to foreign equivalents of the health care laws mentioned above, among other foreign laws.
+Added: If any of the physicians or other health care providers or entities with whom we expect to do business are found to be not in compliance with applicable laws, they may be subject to criminal, civil or administrative sanctions, including exclusions from government-funded health care programs, which may also adversely affect our business.
+Added: The risk of our being found in violation of these laws is increased by the fact that many of these laws have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.
+Added: Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
+Added: The shifting compliance environment and the need to build and maintain a robust system to comply with multiple jurisdictions with different compliance and reporting requirements increases the possibility that a health care company may violate one or more of the requirements.
+Added: Efforts to ensure that our business arrangements with third parties will comply with applicable health care laws and regulations will involve substantial cost.
+Added: Data Privacy and Security
+Added: There are federal, state and foreign laws governing the privacy and security of health information and personal information, many of which differ from each other in significant ways and apply simultaneously, thus complicating compliance efforts.
+Added: HIPAA, as amended by the Health Information Technology for Economic and Clinical Health (“HITECH”), and its implementing regulations, strengthens and expands requirements relating to the privacy, security, and transmission of individually identifiable health information;
+Added: and requires notification to affected individuals and regulatory authorities of certain breaches of security of individually identifiable health information.
+Added: HITECH strengthened and expanded HIPAA and increased penalties for violations.
+Added: Under HITECH, regulated entities are subject to enforcement by the federal government and by state Attorneys General, who were given authority to enforce HIPAA under HITECH.
+Added: Some state laws impose privacy protections more stringent than HIPAA and data security requirements applicable to information beyond health care information (for example, the California Consumer Privacy Act of 2018 (the “CCPA”)).
+Added: These state laws create an additional level of enforcement and may require additional reporting in the event of breach.
+Added: Most of the health care providers in the United States with whom we collaborate to develop and test our products must comply with HIPAA and applicable state law.
+Added: We may not be directly subject to these laws, however, we must structure our activities in compliance with these laws to ensure that we can access and use health information to support our research, development and other activities.
+Added: Our failure to comply with these privacy and security laws or a breach of health information or personal data could prompt enforcement against our health care provider partners, create third party liability for our company and/or cause significant financial or reputational harm to our company.
+Added: We may also be subject to additional privacy restrictions.
+Added: The collection, use, storage, disclosure, transfer, or other processing of personal data regarding individuals in the EEA, including personal health data, is subject to the GDPR, which became effective on May 25, 2018.
+Added: The GDPR is wide-ranging in scope and imposes numerous requirements on companies that process personal data, including requirements relating to processing health and other sensitive data, obtaining explicit consent of the individuals to whom the personal data relates, providing information to individuals regarding data processing activities, implementing safeguards to protect the security and confidentiality of personal data, providing notification of data breaches, and taking certain measures when engaging third-party processors.
+Added: The GDPR also imposes strict rules on the transfer of personal data to countries outside the European Union and EEA, including the United States, and permits data protection authorities to impose large penalties for violations of the GDPR, including potential fines of up to €20 million or 4% of annual global revenues, whichever is greater.
+Added: The GDPR also confers a private right of action on data subjects and consumer associations to lodge complaints with supervisory authorities, seek judicial remedies, and obtain compensation for damages resulting from violations of the GDPR.
+Added: In addition, the GDPR includes restrictions on cross-border data transfers.
+Added: Compliance with the GDPR is a rigorous and time-intensive process that may increase our cost of doing business or require us to change our business practices, and despite those efforts, there is a risk that we may be subject to fines and penalties, litigation, and reputational harm in connection with our European activities.
+Added: Health care reform
+Added: In the United States and some foreign jurisdictions, there have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the health care system that could prevent or delay marketing approval of product and therapeutic candidates, restrict or regulate post-approval activities, and affect the ability to profitably sell product and therapeutic candidates that obtain marketing approval.
+Added: The FDA’s and other regulatory authorities’
+Added: policies may change and additional government regulations may be enacted that could prevent, limit or delay regulatory approval of our product and therapeutic candidates.
+Added: If we are slow or unable to adapt to changes in existing requirements or the adoption of new requirements or policies, or if we are not able to maintain regulatory compliance, we may lose any marketing approval that we otherwise may have obtained and we may not achieve or sustain profitability, which would adversely affect our business, prospects, financial condition and results of operations.
+Added: In addition, the containment of healthcare costs has become a priority of federal and state governments and the prices of therapeutics have been a focus in this effort.
+Added: government, state legislatures and foreign governments also have shown significant interest in implementing cost-containment programs to limit the growth of government-paid healthcare costs, including price controls, restrictions on reimbursement, and requirements for substitution of generic and biosimilar products for branded
+Added: prescription medicines and biologics, respectively.
+Added: In recent years, the U.S.
+Added: Congress has considered reductions in Medicare reimbursement levels for medicines and biologics administered by physicians.
+Added: CMS, the agency that administers the Medicare and Medicaid programs, also has authority to revise reimbursement rates and to implement coverage restrictions for some drugs and biologics.
+Added: Cost reduction initiatives and changes in coverage implemented through legislation or regulation could decrease utilization of and reimbursement for any approved products we may market in the future.
+Added: While Medicare regulations apply only to pharmaceutical benefits for Medicare beneficiaries, private payors often follow Medicare coverage policy and payment limitations in setting their own reimbursement rates.
+Added: Therefore, any reduction in reimbursement that results from federal legislation or regulation may result in a similar reduction in payments from private payors.
+Added: The ACA, as amended by the Health Care and Education Affordability Reconciliation Act, was enacted in 2010 and substantially changed the way health care is financed by both governmental and private insurers in the United States, and significantly impacted the pharmaceutical industry.
+Added: The ACA was intended to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against healthcare fraud and abuse, add new transparency requirements for healthcare and health insurance industries, impose new taxes and fees on pharmaceutical manufacturers, and impose additional health policy reforms.
+Added: With regard to biopharmaceutical products, the ACA, among other things, addressed a new methodology by which rebates owed by manufacturers under the Medicaid Drug Rebate Program are calculated for therapeutics that are inhaled, infused, instilled, implanted or injected, increased the minimum Medicaid rebates owed by manufacturers under the Medicaid Drug Rebate Program and extended the rebate program to individuals enrolled in Medicaid managed care organizations, established annual fees on manufacturers of certain branded prescription medicines, created a new Medicare Part D coverage gap discount program, and expanded the 340B drug discount program.
+Added: As another example, the 2021 Consolidated Appropriations Act signed into law on December 27, 2020 incorporated extensive health care provisions and amendments to existing laws, including a requirement that all manufacturers of medicines and biological products covered under Medicare Part B report the product’s average sales price, to the DHHS beginning on January 1, 2022, subject to enforcement via civil money penalties.
+Added: There have been executive, judicial and Congressional challenges to certain aspects of the ACA since its enactment, and it is possible that there will be additional challenges and amendments to the ACA in the future.
+Added: Other legislative changes have been proposed and adopted since passage of the ACA that affect health care expenditures.
+Added: These changes include aggregate reductions to Medicare payments to providers of up to 2% per fiscal year pursuant to the Budget Control Act of 2011, which began in 2013 and was extended by the Consolidated Appropriations Act for 2023,and will remain in effect through 2032 unless additional Congressional action is taken.
+Added: Further legislative and regulatory changes under the ACA remain possible, but it is unknown what form any such changes or any law would take, and how or whether it may affect the biopharmaceutical industry as a whole or our business in the future.
+Added: We expect that changes or additions to the ACA, the Medicare and Medicaid programs and changes stemming from other healthcare reform measures, especially with regard to healthcare access, financing or other legislation in individual states, could have a material adverse effect on the healthcare industry in the United States.
+Added: In recent years, there has been heightened governmental scrutiny over the manner in which biopharmaceutical manufacturers set prices for their marketed products.
+Added: Such scrutiny has resulted in several recent U.S.
+Added: Congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to medicine pricing, review the relationship between pricing and manufacturer patient programs, reduce the cost of medicines under Medicare, and reform government program reimbursement methodologies for pharmaceutical products.
+Added: Congress and the executive branch have each indicated that it will continue to seek new legislative and/or administrative measures to control the costs of medicines, making this area subject to ongoing uncertainty.
+Added: More recently, in August 2022, President Biden signed into the law the Inflation Reduction Act of 2022 (the “IRA”).
+Added: Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.
+Added: Starting in 2023, a manufacturer of a drug or biological product covered by Medicare Parts B or D must pay a rebate to the federal government if the drug product’s price increases faster than the rate of inflation.
+Added: This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.
+Added: Additionally, starting in payment year 2026, CMS will negotiate drug prices annually for a select number of single-source Part D drugs, including biologics that have been on the market for 13 years, without generic or biosimilar competition.
+Added: CMS will also negotiate drug prices for a select number of Part B drugs, including biologics that have been on the market for 13 years, starting for payment year 2028.
+Added: If a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.
+Added: At the state level in the United States, legislatures have also increasingly passed legislation and implemented regulations designed to control pharmaceutical product pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access, and marketing cost disclosure and transparency measures, and in some cases, designed to encourage importation from other countries and bulk purchasing.
+Added: In December 2020, the U.S.
+Added: Supreme Court held unanimously that federal law does not preempt the states’
+Added: ability to regulate pharmaceutical benefit managers and other members of the healthcare and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.
+Added: We cannot predict the likelihood, nature or extent of government regulation that may arise from future legislation or administrative or executive action, either in the United States or abroad.
+Added: We expect that additional federal, state, and foreign healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, which could result in limited coverage and reimbursement and reduced demand for our products, once approved, or additional pricing pressures.
+Added: Coverage and reimbursement
+Added: Significant uncertainty exists as to the coverage and reimbursement status of any cell-based regenerative therapies for which we may obtain regulatory approval.
+Added: In the United States and markets in other countries, sales of any cell-based therapies for which we receive regulatory approval for commercial sale will depend, in part, on the availability of coverage and reimbursement from payors.
+Added: Payors include government authorities, managed care providers, private health insurers and other organizations.
+Added: Patients who are prescribed treatments for their conditions and providers who prescribe such treatments generally rely on these third-party payors to reimburse all or part of the treatment and other associated health care costs.
+Added: The process for determining whether a payor will provide coverage for a medicine, device or biologic product may be separate from the process for setting the reimbursement rate that the payor will pay for the product.
+Added: Payors may limit coverage to specific products on an approved list, or formulary, which might not include all of the FDA-approved products for a particular indication.
+Added: A decision by a payor not to cover our cell-based therapies could reduce physician utilization of our products, if they are approved, and have a material adverse effect on our sales, results of operations and financial condition.
+Added: Moreover, a payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.
+Added: Adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize an appropriate return on our investment in product development and manufacturing costs.
+Added: Further, due to the COVID-19 pandemic, millions of individuals have lost or may lose employer-based insurance coverage, which may adversely affect our ability to commercialize our products in certain jurisdictions.
+Added: In addition, coverage and reimbursement for products can differ significantly from payor to payor.
+Added: One payor’s decision to cover a particular medical product or service does not ensure that other payors will also provide coverage for the medical product or service, or will provide coverage at an adequate reimbursement rate.
+Added: In the United States, the principal decisions about reimbursement for new medicines are typically made by CMS.
+Added: CMS decides whether and to what extent a new medicine will be covered and reimbursed under Medicare and private payors tend to follow CMS to a substantial degree.
+Added: Additionally, the coverage determination process will require us to provide scientific and clinical support for the use of our products to each payor separately and will be a time-consuming process.
+Added: Payors are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.
+Added: In order to obtain and maintain coverage and reimbursement for any product, we may need to conduct expensive evidence generation studies in order to demonstrate the medical necessity and cost-effectiveness of such a product, in addition to the costs required to obtain regulatory approvals.
+Added: If payors do not consider a product to be cost-effective compared to current standards of care, they may not cover the product as a benefit under their plans or, if they do, the level of payment may not be sufficient to allow a company to cover its costs or make a profit.
+Added: Outside of the United States, the pricing of pharmaceutical products is subject to governmental control in many countries.
+Added: For example, in the European Union, pricing and reimbursement schemes vary widely from country to country.
+Added: Some countries provide that products may be marketed only after a reimbursement price has been agreed with the government authority.
+Added: Furthermore, some countries may require the completion of additional studies that compare the effectiveness and/or cost-effectiveness of a particular therapy to current standards of care as part of so-called health technology assessments in order to obtain reimbursement or pricing approval.
+Added: Additionally, there may be a need for activities to secure reimbursement for procedures associated with products administered in a hospital setting under the diagnosis-related group system, whereby a billing code may not exist or may be currently insufficient to cover the cost of the procedure.
+Added: In other instances, countries may monitor and control product volumes and issue guidance to physicians to limit prescriptions in the form of treatment policies.
+Added: Efforts to control prices and utilization of pharmaceutical products and medical devices will likely continue as countries attempt to manage health care expenditures.
Human Capital Resources
−Removed: We currently have three officers and do not intend to have any full-time employees prior to the completion of our initial Business Combination.
−Removed: Members of our management team are not obligated to devote any specific number of hours to our matters but they intend to devote as much of their time as they deem necessary to our affairs until we have completed our initial Business Combination.
−Removed: The amount of time that any such person will devote in any time period will vary based on the status of the proposed ProKidney Business Combination and, if the proposed ProKidney Business Combination is not consummated, whether a different target business has been selected for our initial Business Combination and the current stage of the Business Combination process.
−Removed: Risk Factors.
−Removed: An investment in our securities involves a high degree of risk.
−Removed: You should consider carefully all of the risks described below, together with the other information contained in this Annual Report, including our financial statements and related notes, before making a decision to invest in our securities.
−Removed: If any of the following events occur, our business, financial condition and operating results may be materially adversely affected.
−Removed: In that event, the trading price of our securities could decline, and you could lose all or part of your investment.
−Removed: The risks and uncertainties described below are not the only ones we face.
−Removed: Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business, financial condition and operating results.
−Removed: For risk factors related to the proposed ProKidney Business Combination, see the “Risk Factors” section of the ProKidney Disclosure Statement that we have filed with the SEC.
−Removed: Risks Relating to Our Search for, Consummation of or Inability to Consummate a Business Combination
−Removed: Our public shareholders may not be afforded an opportunity to vote on our proposed Business Combination, which means we may complete our initial Business Combination even though a majority of our public shareholders do not support such a combination.
−Removed: We may not hold a shareholder vote to approve our initial Business Combination unless the Business Combination would require shareholder approval under applicable law or stock exchange rules or if we decide to hold a shareholder vote for business or other reasons.
−Removed: For instance, the Nasdaq listing rules currently allow us to engage in a tender offer in lieu of a general meeting, but would still require us to obtain shareholder approval if we were seeking to issue more than 20% of our issued and outstanding shares to a target business as consideration in any Business Combination.
−Removed: Therefore, if we were structuring a Business Combination that required us to issue more than 20% of our issued and outstanding shares, we would seek shareholder approval of such Business Combination.
−Removed: However, except as required by applicable law or stock exchange rules, the decision as to whether we will seek shareholder approval of a proposed Business Combination or will allow shareholders to sell their shares to us in a tender offer will be made by us, solely in our discretion, and will be based on a variety of factors such as the timing of the transaction and whether the terms of the transaction would otherwise require us to seek shareholder approval.
−Removed: Accordingly, we may consummate our initial Business Combination even if holders of a majority of the issued and outstanding ordinary shares do not approve of the Business Combination we consummate.
−Removed: If we seek shareholder approval of our initial Business Combination, our initial shareholders, directors and officers have agreed to vote in favor of such initial Business Combination, regardless of how our public shareholders vote.
−Removed: Unlike some other blank check companies in which the initial shareholders agree to vote their founder shares in accordance with the majority of the votes cast by the public shareholders in connection with an initial Business Combination, our initial shareholders, directors and officers have agreed (and their permitted transferees will agree), pursuant to the terms of letter agreements entered into with us, to vote their founder shares, private placement shares and any public shares held by them in favor of our initial Business Combination.
−Removed: As a result, in addition to our initial shareholders’ founder shares and the private placement shares, we would need 9,055,001, or 36.22% (assuming all issued and outstanding shares are voted), or 1,082,502, or 4.33% (assuming only the minimum number of shares representing a quorum are voted), of the 25,000,000 public shares sold in the Initial Public Offering to be voted in favor of an initial Business Combination in order to have such initial Business Combination approved.
−Removed: We expect that our initial shareholders and their permitted transferees will own at least 21.6% of our issued and outstanding ordinary shares at the time of any such shareholder vote.
−Removed: Accordingly, if we seek shareholder approval of our initial Business Combination, it is more likely that the necessary shareholder approval will be received than would be the case if such persons agreed to vote their founder shares in accordance with the majority of the votes cast by our public shareholders.
−Removed: Your only opportunity to affect the investment decision regarding a potential Business Combination will be limited to the exercise of your right to redeem your shares from us for cash, unless we seek shareholder approval of such Business Combination.
−Removed: At the time of your investment in us, you will not be provided with an opportunity to evaluate the specific merits or risks of any target businesses.
−Removed: Additionally, since we may complete a Business Combination without seeking shareholder approval, public shareholders may not have the right or opportunity to vote on the Business Combination, unless we seek such shareholder approval.
−Removed: Accordingly, if we do not seek shareholder approval, your only opportunity to affect the investment decision regarding a potential Business Combination may be limited to exercising your redemption rights within the period of time (which will be at least 20 business days) set forth in our tender offer documents mailed to our public shareholders in which we describe our initial Business Combination.
−Removed: The ability of our public shareholders to redeem their shares for cash may make our financial condition unattractive to potential Business Combination targets, which may make it difficult for us to enter into a Business Combination with a target.
−Removed: We may seek to enter into a Business Combination transaction agreement with a prospective target that requires as a closing condition that we have a minimum net worth or a certain amount of cash.
−Removed: If too many public shareholders exercise their redemption rights, we would not be able to meet such closing condition and, as a result, would not be able to proceed with the Business Combination.
−Removed: The amount of the deferred underwriting commissions payable to the underwriter will not be adjusted for any shares that are redeemed in connection with a Business Combination and such amount of deferred underwriting discount is not available for us to use as consideration in an initial Business Combination.
−Removed: If we are able to consummate an initial Business Combination, the per-share
−Removed: value of shares held by non-redeeming
−Removed: shareholders will reflect our obligation to pay and the payment of the deferred underwriting commissions.
−Removed: Furthermore, in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial Business Combination.
−Removed: Consequently, if accepting all properly submitted redemption requests would cause our net tangible assets to be less than $5,000,001 or such greater amount necessary to satisfy a closing condition as described above, we would not proceed with such redemption and the related Business Combination and may instead search for an alternate Business Combination.
−Removed: Prospective targets will be aware of these risks and, thus, may be reluctant to enter into a Business Combination transaction with us.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares may not allow us to complete the most desirable Business Combination or optimize our capital structure.
−Removed: At the time we enter into an agreement for our initial Business Combination, we will not know how many shareholders may exercise their redemption rights and, therefore, we will need to structure the transaction based on our expectations as to the number of shares that will be submitted for redemption.
−Removed: If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, we will need to reserve a portion of the cash in the Trust Account to meet such requirements, or arrange for third-party financing.
−Removed: In addition, if a larger number of shares is submitted for redemption than we initially expected, we may need to restructure the transaction to reserve a greater portion of the cash in the Trust Account or arrange for third-party financing.
−Removed: Raising additional third-party financing may involve dilutive equity issuances or the incurrence of indebtedness at higher than desirable levels.
−Removed: The above considerations may limit our ability to complete the most desirable Business Combination available to us or optimize our capital structure.
−Removed: The ability of our public shareholders to exercise redemption rights with respect to a large number of our shares could increase the probability that our initial Business Combination would be unsuccessful and that you would have to wait for liquidation in order to redeem your shares.
−Removed: If our initial Business Combination agreement requires us to use a portion of the cash in the Trust Account to pay the purchase price, or requires us to have a minimum amount of cash at closing, the probability that our initial Business Combination would be unsuccessful increases.
−Removed: If our initial Business Combination is unsuccessful, you would not receive your pro rata portion of the Trust Account until we liquidate the Trust Account.
−Removed: If you are in need of immediate liquidity, you could attempt to sell your shares in the open market;
−Removed: however, at such time our shares may trade at a discount to the pro rata amount per share in the Trust Account.
−Removed: In either situation, you may suffer a material loss on your investment or lose the benefit of funds expected in connection with our redemption until we liquidate or you are able to sell your shares in the open market.
−Removed: The requirement that we complete our initial Business Combination within the prescribed time frame may give potential target businesses leverage over us in negotiating a Business Combination and may limit the time we have in which to conduct due diligence on potential Business Combination targets, in particular as we approach our dissolution deadline, which could undermine our ability to complete our initial Business Combination on terms that would produce value for our shareholders.
−Removed: Any potential target business with which we enter into negotiations concerning a Business Combination will be aware that we must complete our initial Business Combination by July 2, 2023, the date that is 24 months from the closing of the Initial Public Offering.
−Removed: Consequently, such target business may obtain leverage over us in negotiating a Business Combination, knowing that if we do not complete our initial Business Combination with that particular target business, we may be unable to complete our initial Business Combination with any target business.
−Removed: This risk will increase as we get closer to the end of the 24-month
−Removed: In addition, we may have limited time to conduct due diligence and may enter into our initial Business Combination on terms that we would have rejected upon a more comprehensive investigation.
−Removed: In July 2021, the SEC charged a SPAC for misleading disclosures, which could have been corrected with more adequate due diligence, and obtained substantial relief against the SPAC and its sponsor.
−Removed: Although we will invest in due diligence efforts and commit management time and resources to such efforts, there can be no assurance that our due diligence will unveil all potential issues with a target business and that we or our sponsor will not become subject to regulatory actions related to such efforts.
−Removed: We may not be able to complete our initial Business Combination within the prescribed time frame, in which case we would cease all operations except for the purpose of winding up and we would redeem our public shares and liquidate, in which case our public shareholders may receive only $10.00 per share, or less than such amount in certain circumstances.
−Removed: Our Sponsor, directors and officers have agreed that we must complete our initial Business Combination within 24 months from the closing of the Initial Public Offering.
−Removed: We may not be able to find a suitable target business and complete our initial Business Combination within such time period.
−Removed: Our ability to complete our initial Business Combination may be negatively impacted by general market conditions, volatility in the equity and debt markets and the other risks described herein, including as a result of terrorist attacks, natural disasters, global hostilities or a significant outbreak of infectious diseases.
−Removed: For example, the COVID-19
−Removed: pandemic continues both in the U.S.
−Removed: and globally and, while the extent of the impact of the pandemic on us will depend on future developments, it could limit our ability to complete our initial Business Combination, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
−Removed: Additionally, the COVID-19
−Removed: pandemic and other events (such as terrorist attacks, natural disasters, global hostilities or a significant outbreak of other infectious diseases) may negatively impact businesses we may seek to acquire.
−Removed: If we have not completed our initial Business Combination within the Combination Period, we will:
−Removed: (1) cease all operations except for the purpose of winding up;
−Removed: (2) as promptly as reasonably possible but not more than 10 business days thereafter, redeem the public shares, at a per-share
−Removed: price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), divided by
−Removed: the number of then issued and outstanding public shares, which redemption will completely extinguish public shareholders’ rights as shareholders (including the right to receive further liquidating distributions, if any);
−Removed: and (3) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law.
−Removed: In such case, our public shareholders may receive only $10.00 per share, or less than $10.00 per share, on the redemption of their shares.
−Removed: See “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
−Removed: redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
−Removed: Our search for a Business Combination, and any target business with which we ultimately consummate a Business Combination, may be materially adversely affected by the COVID-19
−Removed: pandemic and other events and the status of debt and equity markets.
−Removed: pandemic has adversely affected, and other events (such as terrorist attacks, natural disasters, global hostilities or a significant outbreak of other infectious diseases) could adversely affect, economies and financial markets worldwide, business operations and the conduct of commerce generally, and the business of any potential target business with which we consummate a Business Combination could be, or may already have been, materially and adversely affected.
−Removed: Furthermore, we may be unable to complete a Business Combination if concerns relating to COVID-19
−Removed: or other events restrict travel or limit the ability to have meetings with potential investors, or the target company’s personnel, vendors and services providers are unavailable to negotiate and consummate a transaction in a timely manner.
−Removed: The extent to which COVID-19
−Removed: impacts our search for a Business Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19
−Removed: variants and the actions to contain COVID-19
−Removed: or treat its impact, among others.
−Removed: If the disruptions posed by COVID-19
−Removed: or other events (such as terrorist attacks, natural disasters, global hostilities or a significant outbreak of other infectious diseases) continue for a prolonged period of time, our ability to consummate a Business Combination, or the operations of a target business with which we ultimately consummate a Business Combination, may be materially adversely affected.
−Removed: In addition, our ability to consummate a transaction may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19
−Removed: and other events (such as terrorist attacks, natural disasters, global hostilities or a significant outbreak of other infectious diseases), including as a result of increased market volatility and decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.
−Removed: Finally, the COVID-19
−Removed: pandemic and other events (such as terrorist attacks, natural disasters, global hostilities or a significant outbreak of other infectious diseases) may also have the effect of heightening many of the other risks described in this “Risk Factors” section, such as those related to the market for our securities and cross-border transactions.
−Removed: If we seek shareholder approval of our initial Business Combination, our Sponsor, directors, officers, advisors or any of their respective affiliates may elect to purchase shares from public shareholders, which may influence a vote on a proposed Business Combination and reduce the public “float” of our securities.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our Sponsor, directors, officers, advisors or any of their respective affiliates may purchase public shares in privately negotiated transactions or in the open market either prior to or following the completion of our initial Business Combination.
−Removed: Any such price per share may be different than the amount per share a public shareholder would receive if it elected to redeem its shares in connection with our initial Business Combination.
−Removed: Additionally, at any time at or prior to our initial Business Combination, subject to applicable securities laws (including with respect to material nonpublic information), our Sponsor, directors, officers, advisors or any of their respective affiliates may enter into transactions with investors and others to provide them with incentives to acquire public shares, vote their public shares in favor of our initial Business Combination or not redeem their public shares.
−Removed: However, our Sponsor, directors, officers, advisors or any of their respective affiliates are under no obligation or duty to do so and they have no current commitments, plans or intentions to engage in any such transactions and have not formulated any terms or conditions for any such transactions.
−Removed: The purpose of such purchases could be to vote such shares in favor of our initial Business Combination and thereby increase the likelihood of obtaining shareholder approval of our initial Business Combination or to satisfy a closing condition in an agreement with a target that requires us to have a minimum net worth or a certain amount of cash at the closing of our initial Business Combination, where it appears that such requirement would otherwise not be met.
−Removed: This may result in the completion of our initial Business Combination that may not otherwise have been possible.
−Removed: In addition, if such purchases are made, the public “float” of our securities and the number of beneficial holders of our securities may be reduced, possibly making it difficult to maintain or obtain the quotation, listing or trading of our securities on a national securities exchange.
−Removed: You are not entitled to protections normally afforded to investors of many other blank check companies.
−Removed: We are exempt from certain rules promulgated by the SEC related to certain blank check companies, such as Rule 419.
−Removed: Accordingly, investors are not afforded the benefits or protections of those rules.
−Removed: Among other things, this means we will have a longer period of time to complete our initial Business Combination than do companies subject to Rule 419.
−Removed: Moreover, if the Initial Public Offering was subject to Rule 419, that rule would prohibit the release of any interest earned on funds held in the Trust Account to us unless and until the funds in the Trust Account were released to us in connection with our completion of an initial Business Combination.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions pursuant to the tender offer rules, and if you or a “group” of shareholders are deemed to hold in excess of 15% of our Class A ordinary shares, you will lose the ability to redeem all such shares in excess of 15% of our Class A ordinary shares.
−Removed: If we seek shareholder approval of our initial Business Combination and we do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, our amended and restated memorandum and articles of association provide that a public shareholder, together with any affiliate of such shareholder or any other person with whom such shareholder is acting in concert or as a “group” (as defined under Section 13 of the Exchange Act), will be restricted from redeeming its shares with respect to more than an aggregate of 15% of the shares sold in the Initial Public Offering, which we refer to as the “Excess Shares,” without our prior consent.
−Removed: However, we would not be restricting our shareholders’ ability to vote all of their shares (including Excess Shares) for or against our initial Business Combination.
−Removed: Your inability to redeem the Excess Shares will reduce your influence over our ability to complete our initial Business Combination and you could suffer a material loss on your investment in us if you sell Excess Shares in open market transactions.
−Removed: Additionally, you will not receive redemption distributions with respect to the Excess Shares if we complete our initial Business Combination.
−Removed: And as a result, you will continue to hold that number of shares exceeding 15% and, in order to dispose of such shares, would be required to sell your shares in open market transactions, potentially at a loss.
−Removed: If a shareholder fails to receive notice of our offer to redeem our public shares in connection with our initial Business Combination, or fails to comply with the procedures for tendering its shares, such shares may not be redeemed.
−Removed: We will comply with the tender offer rules or proxy rules, as applicable, when conducting redemptions in connection with our initial Business Combination.
−Removed: Despite our compliance with these rules, if a shareholder fails to receive our tender offer or proxy materials, as applicable, such shareholder may not become aware of the opportunity to redeem its shares.
−Removed: In addition, the tender offer documents or proxy materials, as applicable, that we will furnish to holders of our public shares in connection with our initial Business Combination will describe the various procedures that must be complied with in order to validly tender or redeem public shares.
−Removed: In the event that a shareholder fails to comply with these procedures, its shares may not be redeemed.
−Removed: Because of our limited resources and the significant competition for Business Combination opportunities, it may be more difficult for us to complete our initial Business Combination.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on our redemption of their shares.
−Removed: We have encountered, and expect to continue to encounter, intense competition from other entities having a business objective similar to ours, including private investors (which may be individuals or investment partnerships), other blank check companies (including potentially from the Other SCS SPACs, each of which is focused on pursuing an initial business combination with a target operating in the biotechnology industry) and other entities, domestic and international, competing for the types of businesses we intend to acquire.
−Removed: Many of these individuals and entities are well established and have extensive experience in identifying and effecting, directly or indirectly, acquisitions of companies operating in or providing services to various industries.
−Removed: Many of these competitors possess greater technical, human and other resources or more local industry knowledge than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors.
−Removed: Additionally, the number of blank check companies looking for business combination targets has increased compared to recent years and many of these blank check companies are sponsored by entities or persons that have significant experience with completing business combinations.
−Removed: While we believe there are numerous target businesses we could potentially acquire with the net proceeds of the Initial Public Offering and the sale of the private placement shares, our ability to compete with respect to the acquisition of certain target businesses that are sizable will be limited by our available financial resources.
−Removed: This inherent competitive limitation gives others an advantage in pursuing the acquisition of certain target businesses.
−Removed: Furthermore, in the event we seek shareholder approval of our initial Business Combination and we are obligated to pay cash for our public shares, it will potentially reduce the resources available to us for our initial Business Combination.
−Removed: Any of these obligations may place us at a competitive disadvantage in successfully negotiating a Business Combination.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: See “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
−Removed: redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
−Removed: As the number of special purpose acquisition companies increases, attractive targets may become scarce and there may be more competition to find an attractive target for an initial Business Combination.
−Removed: This could increase the costs associated with completing our initial Business Combination and may result in our inability to find a suitable target for our initial Business Combination and/or complete our initial Business Combination.
−Removed: In recent years, the number of special purpose acquisition companies that have been formed has increased substantially.
−Removed: Many companies have entered into business combinations with special purpose acquisition companies, and there are still many special purpose acquisition companies seeking targets for their initial business combination, as well as many additional special purpose acquisition companies currently in registration.
−Removed: As a result, at times, fewer attractive targets may be available, and it may require more time, effort and resources to identify a suitable target for an initial Business Combination and/or complete our initial Business Combination.
−Removed: In addition, because there are more special purpose acquisition companies seeking to enter into an initial Business Combination with available targets, the competition for available targets with attractive fundamentals or business models may increase, which could cause target companies to demand improved financial terms.
−Removed: Attractive deals could also become scarcer for other reasons, such as economic or industry sector downturns, geopolitical tensions or increases in the cost of additional capital needed to close Business Combinations or operate targets post-Business Combination.
−Removed: This could increase the cost of, delay or otherwise complicate or frustrate our ability to find a suitable target for and/or complete our initial Business Combination.
−Removed: If the funds not being held in the Trust Account are insufficient to allow us to operate for at least the 24 months following the closing of the Initial Public Offering, we may be unable to complete our initial Business Combination.
−Removed: The funds available to us outside of the Trust Account may not be sufficient to allow us to operate for at least the 24 months following the closing of the Initial Public Offering, assuming that our initial Business Combination is not completed during that time.
−Removed: We have incurred, and expect to continue to incur, significant costs in pursuit of our acquisition plans.
−Removed: Management’s plans to address this need for capital through the proceeds from the Initial Public Offering held outside of the Trust Account and potential loans from certain of our affiliates are discussed in the section of the annual report titled “Item 7.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations.” However, our affiliates are not obligated to make loans to us in the future, and we may not be able to raise additional financing from unaffiliated parties necessary to fund our expenses.
−Removed: Any such event in the future may negatively impact the analysis regarding our ability to continue as a going concern at such time.
−Removed: Of the funds available to us, we could use a portion of the funds to pay fees to consultants to assist us with our search for a target business.
−Removed: We could also use a portion of the funds as a down payment or to fund a “no-shop”
−Removed: provision (a provision in letters of intent or merger agreements designed to keep target businesses from “shopping” around for transactions with other companies or investors on terms more favorable to such target businesses) with respect to a particular proposed Business Combination, although we do not have any current intention to do so.
−Removed: If we enter into a letter of intent or merger agreement where we paid for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds (whether as a result of our breach or otherwise), we might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: See “— If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
−Removed: redemption amount received by shareholders may be less than $10.00 per share” and other risk factors herein.
−Removed: Changes in the market for directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.
−Removed: Recently, the market for directors and officers liability insurance for special purpose acquisition companies has changed in ways adverse to us and our management team.
−Removed: Fewer insurance companies are offering quotes for directors and officers liability coverage, the premiums charged for such policies have generally increased and the terms of such policies have generally become less favorable.
−Removed: These trends may continue into the future.
−Removed: The increased cost and decreased availability of directors and officers liability insurance could make it more difficult and more expensive for us to negotiate and complete an initial Business Combination.
−Removed: In order to obtain directors and officers liability insurance or modify its coverage as a result of becoming a public company, the post-Business Combination entity might need to incur greater expense and/or accept less favorable terms.
−Removed: Furthermore, any failure to obtain adequate directors and officers liability insurance could have an adverse impact on the post-Business Combination’s ability to attract and retain qualified officers and directors.
−Removed: In addition, after completion of any initial Business Combination, our directors and officers could be subject to potential liability from claims arising from conduct alleged to have occurred prior to such initial Business Combination.
−Removed: As a result, in order to protect our directors and officers, the post-Business Combination entity may need to purchase additional insurance with respect to any such claims (“run-off
−Removed: The need for run-off
−Removed: insurance would be an added expense for the post-Business Combination entity and could interfere with or frustrate our ability to consummate an initial Business Combination on terms favorable to our investors.
−Removed: If third parties bring claims against us, the proceeds held in the Trust Account could be reduced and the per-share
−Removed: redemption amount received by shareholders may be less than $10.00 per share.
−Removed: Our placing of funds in the Trust Account may not protect those funds from third-party claims against us.
−Removed: Although we will seek to have all vendors, service providers (other than our independent auditors), prospective target businesses and other entities with which we do business execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the Trust Account for the benefit of our public shareholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the Trust Account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against our assets, including the funds held in the Trust Account.
−Removed: If any third party refuses to execute an agreement waiving such claims to the monies held in the Trust Account, our management will perform an analysis of the alternatives available to it and will enter into an agreement with a third party that has not executed a waiver only if management believes that such third party’s engagement would be significantly more beneficial to us than any alternative.
−Removed: Examples of possible instances where we may engage a third party that refuses to execute a waiver include the engagement of a third-party consultant whose particular expertise or skills are believed by management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where we are unable to find a service provider willing to execute a waiver.
−Removed: In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the Trust Account for any reason.
−Removed: Upon redemption of our public shares, if we have not completed our initial Business Combination within the required time period, or upon the exercise of a redemption right in connection with our initial Business Combination, we will be required to provide for payment of claims of creditors that were not waived that may be brought against us within the 10 years following redemption.
−Removed: Accordingly, the per-share
−Removed: redemption amount received by public shareholders could be less than the $10.00 per public share initially held in the Trust Account, due to claims of such creditors.
−Removed: Our Sponsor has agreed that it will be liable to us if and to the extent any claims by a third party (other than our independent auditors) for services rendered or products sold to us, or a prospective target business with which we have discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, except as to any claims by a third party that executed a waiver of any and all rights to seek access to the Trust Account and except as to any claims under our indemnity of the underwriter of the Initial Public Offering against certain liabilities, including liabilities under the Securities Act.
−Removed: Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, our Sponsor will not be responsible to the extent of any liability for such third-party claims.
−Removed: We have not independently verified whether our Sponsor has sufficient funds to satisfy its indemnity obligations and believe that our Sponsor’s only assets are securities of our company.
−Removed: Our Sponsor may not have sufficient funds available to satisfy those obligations.
−Removed: We have not asked our Sponsor to reserve for such obligations, and therefore, no funds are currently set aside to cover any such obligations.
−Removed: As a result, if any such claims were successfully made against the Trust Account, the funds available for our initial Business Combination and redemptions could be reduced to less than $10.00 per public share.
−Removed: In such event, we may not be able to complete our initial Business Combination, and you would receive such lesser amount per public share in connection with any redemption of your public shares.
−Removed: None of our directors or officers will indemnify us for claims by third parties including, without limitation, claims by vendors and prospective target businesses.
−Removed: Our directors may decide not to enforce the indemnification obligations of our Sponsor, resulting in a reduction in the amount of funds in the Trust Account available for distribution to our public shareholders.
−Removed: In the event that the proceeds in the Trust Account are reduced below the lesser of (1) $10.00 per public share or (2) such lesser amount per public share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, in each case net of the interest which may be withdrawn to pay taxes, and our Sponsor asserts that it is unable to satisfy its obligations or that it has no indemnification obligations related to a particular claim, our independent directors would determine whether to take legal action against our Sponsor to enforce its indemnification obligations.
−Removed: While we currently expect that our independent directors would take legal action on our behalf against our Sponsor to enforce its indemnification obligations to us, it is possible that our independent directors in exercising their business judgment may choose not to do so in any particular instance.
−Removed: If our independent directors choose not to enforce these indemnification obligations, the amount of funds in the Trust Account available for distribution to our public shareholders may be reduced below $10.00 per share.
−Removed: The securities in which we invest the funds held in the Trust Account could bear a negative rate of interest, which could reduce the value of the assets held in trust such that the per-share
−Removed: redemption amount received by public shareholders may be less than $10.00 per share.
−Removed: The proceeds held in the Trust Account will be invested only in U.S.
−Removed: government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S.
−Removed: While short-term U.S.
−Removed: government treasury obligations currently yield a positive rate of interest, they have briefly yielded negative interest rates in recent years.
−Removed: Central banks in Europe and Japan pursued interest rates below zero in recent years, and the Open Market Committee of the Federal Reserve has not ruled out the possibility that it may in the future adopt similar policies in the United States.
−Removed: In the event that we are unable to complete our initial Business Combination or make certain amendments to our amended and restated memorandum and articles of association, our public shareholders are entitled to receive their pro rata share of the proceeds held in the Trust Account, plus
−Removed: any interest income, net of taxes paid or payable (less, in the case we are unable to complete our initial Business Combination, $100,000 of interest).
−Removed: Negative interest rates could reduce the value of the assets held in trust such that the per-share
−Removed: redemption amount received by public shareholders may be less than $10.00 per share.
−Removed: Negative interest rates could also reduce the amount of funds we have available to complete our initial Business Combination.
−Removed: If, before distributing the proceeds in the Trust Account to our public shareholders, we file a winding-up
−Removed: or bankruptcy petition or an involuntary winding-up
−Removed: or bankruptcy petition is filed against us that is not dismissed, the claims of creditors in such proceeding may have priority over the claims of our shareholders and the per-share
−Removed: amount that would otherwise be received by our shareholders in connection with our liquidation may be reduced.
−Removed: If, before distributing the proceeds in the Trust Account to our public shareholders, we file a winding-up
−Removed: or bankruptcy petition or an involuntary winding-up
−Removed: or bankruptcy petition is filed against us that is not dismissed, the proceeds held in the Trust Account could be subject to applicable insolvency law, and may be included in our liquidation estate and subject to the claims of third parties with priority over the claims of our shareholders.
−Removed: To the extent any liquidation claims deplete the Trust Account, the per-share
−Removed: amount that would otherwise be received by our shareholders in connection with our liquidation would be reduced.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a winding-up
−Removed: or bankruptcy petition or an involuntary winding-up
−Removed: or bankruptcy petition is filed against us that is not dismissed, a bankruptcy court may seek to recover such proceeds, and the members of our board of directors may be viewed as having breached their fiduciary duties to our creditors, thereby exposing the members of our board of directors and us to claims of punitive damages.
−Removed: If, after we distribute the proceeds in the Trust Account to our public shareholders, we file a winding-up
−Removed: or bankruptcy petition or an involuntary winding-up
−Removed: or bankruptcy petition is filed against us that is not dismissed, any distributions received by shareholders could be viewed under applicable debtor/creditor and/or insolvency laws as a voidable performance.
−Removed: As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
−Removed: In addition, our board of directors may be viewed as having breached its fiduciary duty to our creditors and/or having acted in bad faith by paying public shareholders from the Trust Account prior to addressing the claims of creditors, thereby exposing itself and us to claims of punitive damages.
−Removed: If we are deemed to be an investment company under the Investment Company Act, we may be required to institute burdensome compliance requirements and our activities may be restricted, which may make it difficult for us to complete our initial Business Combination.
−Removed: If we are deemed to be an investment company under the Investment Company Act, our activities may be restricted, including:
−Removed: • restrictions on the nature of our investments;
−Removed: • restrictions on the issuance of securities,
−Removed: each of which may make it difficult for us to complete our initial Business Combination.
−Removed: In addition, we may have imposed upon us burdensome requirements, including:
−Removed: • registration as an investment company with the SEC;
−Removed: • adoption of a specific form of corporate structure;
−Removed: • reporting, record keeping, voting, proxy and disclosure requirements and other rules and regulations to which we are currently not subject.
−Removed: We do not believe that our anticipated principal activities will subject us to the Investment Company Act.
−Removed: The proceeds held in the Trust Account may be invested by the trustee only in U.S.
−Removed: government treasury bills with a maturity of 185 days or less or in money market funds investing solely in U.S.
−Removed: Treasuries and meeting certain conditions under Rule 2a-7
−Removed: under the Investment Company Act.
−Removed: Because the investment of the proceeds will be restricted to these instruments, we believe we will meet the requirements for the exemption provided in Rule 3a-1
−Removed: promulgated under the Investment Company Act.
−Removed: If we were deemed to be subject to the Investment Company Act, compliance with these additional regulatory burdens would require additional expenses for which we have not allotted funds and may hinder our ability to complete a Business Combination.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: Changes in laws or regulations or how such laws or regulations are interpreted or applied, or a failure to comply with any laws or regulations, may adversely affect our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
−Removed: We are subject to laws and regulations enacted by national, regional and local governments.
−Removed: In particular, we will be required to comply with certain SEC and other legal requirements, our business combination may be contingent on our ability to comply with certain laws and regulations and any post-business combination company may be subject to additional laws and regulations.
−Removed: Compliance with, and monitoring of, applicable laws and regulations may be difficult, time consuming and costly.
−Removed: Those laws and regulations and their interpretation and application may also change from time to time, including as a result of changes in economic, political, social and government policies, and those changes could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
−Removed: In addition, a failure to comply with applicable laws or regulations, as interpreted and applied, could have a material adverse effect on our business, including our ability to negotiate and complete our initial Business Combination, and results of operations.
−Removed: If we have not completed our initial Business Combination within the Combination Period, our public shareholders may be forced to wait beyond the Combination Period before redemption from our Trust Account.
−Removed: If we have not completed our initial Business Combination within the Combination Period, we will distribute the aggregate amount then on deposit in the Trust Account, including interest (less up to $100,000 of interest to pay dissolution expenses and which interest shall be net of taxes payable), pro rata to our public shareholders by way of redemption and cease all operations except for the purposes of winding up of our affairs, as further described herein.
−Removed: Any redemption of public shareholders from the Trust Account shall be effected automatically by function of our amended and restated memorandum and articles of association prior to any voluntary winding up.
−Removed: If we are required to windup, liquidate the Trust Account and distribute such amount therein, pro rata, to our public shareholders, as part of any liquidation process, such winding up, liquidation and distribution must comply with the applicable provisions of the Companies Act (As Revised) of the Cayman Islands (the “Companies Act”).
−Removed: In that case, investors may be forced to wait beyond the Combination Period before the redemption proceeds of our Trust Account become available to them and they receive the return of their pro rata portion of the proceeds from our Trust Account.
−Removed: We have no obligation to return funds to investors prior to the date of our redemption or liquidation unless, prior thereto, we consummate our initial Business Combination or amend certain provisions of our amended and restated memorandum and articles of association and then only in cases where investors have properly sought to redeem their Class A ordinary shares.
−Removed: Only upon our redemption or any liquidation will public shareholders be entitled to distributions if we have not completed our initial Business Combination within the required time period and do not amend certain provisions of our amended and restated memorandum and articles of association prior thereto.
−Removed: Our shareholders may be held liable for claims by third parties against us to the extent of distributions received by them upon redemption of their shares.
−Removed: If we are forced to enter into an insolvent liquidation, any distributions received by shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, we were unable to pay our debts as they fall due in the ordinary course of business.
−Removed: As a result, a liquidator could seek to recover some or all amounts received by our shareholders.
−Removed: Furthermore, our directors may be viewed as having breached their fiduciary duties to us or our creditors and/or may have acted in bad faith, and thereby exposing themselves and our company to claims, by paying public shareholders from the Trust Account prior to addressing the claims of creditors.
−Removed: We cannot assure you that claims will not be brought against us for these reasons.
−Removed: We and our directors and officers who knowingly and willfully authorized or permitted any distribution to be paid out of our share premium account while we were unable to pay our debts as they fall due in the ordinary course of business would be guilty of an offence and may be liable for a fine of up to approximately $18,300 and to imprisonment for up to five years in the Cayman Islands.
−Removed: We may not hold an annual general meeting until after the consummation of our initial Business Combination.
−Removed: Our public shareholders will not have the right to elect or remove directors prior to the consummation of our initial Business Combination.
−Removed: In accordance with Nasdaq corporate governance requirements, we are not required to hold an annual general meeting until one year after our first fiscal year end following our listing on Nasdaq.
−Removed: There is no requirement under the Companies Act for us to hold annual or general meetings to appoint directors.
−Removed: Until we hold an annual general meeting, public shareholders may not be afforded the opportunity to discuss company affairs with management.
−Removed: In addition, holders of our Class A ordinary shares, including our public shareholders, will not have the right to vote on the appointment of directors prior to consummation of our initial Business Combination.
−Removed: In addition, holders of a majority of our founder shares may remove a member of our board of directors for any reason.
−Removed: The grant of registration rights to our initial shareholders and their permitted transferees may make it more difficult to complete our initial Business Combination, and the future exercise of such rights may adversely affect the market price of our Class A ordinary shares.
−Removed: Pursuant to a registration rights agreement entered into in connection with the Initial Public Offering, at or after the time of our initial Business Combination, our initial shareholders and their permitted transferees can demand that we register the resale of their founder shares after those shares convert to our Class A ordinary shares.
−Removed: In addition, our Sponsor and its permitted transferees can demand that we register the resale of the private placement shares, and holders of shares that may be issued upon conversion of working capital loans may demand that we register the resale of such shares.
−Removed: We will bear the cost of registering these securities.
−Removed: The registration and availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of our Class A ordinary shares.
−Removed: In addition, the existence of the registration rights may make our initial Business Combination more costly or difficult to conclude.
−Removed: This is because the shareholders of the target business may increase the equity stake they seek in the combined entity or ask for more cash consideration to offset the negative impact on the market price of our Class A ordinary shares that is expected when the ordinary shares owned by our initial shareholders or their permitted transferees, our private placement shares or shares issued in connection with working capital loans are registered for resale.
−Removed: Because we are not limited to a particular industry, subsector therein, geographic area or any specific target businesses with which to pursue our initial Business Combination, you will be unable to ascertain the merits or risks of any particular target business’s operations.
−Removed: We may seek to complete a Business Combination with an operating company of any size (subject to our satisfaction of the 80% of net assets test) and in any industry, subsector therein or geographic area.
−Removed: However, we will not, under our amended and restated memorandum and articles of association, be permitted to effectuate our initial Business Combination solely with another blank check company or similar company with nominal operations.
−Removed: Unless and until we have disclosed a specific target business with respect to a Business Combination, there will be no basis to evaluate the possible merits or risks of any particular target business’s operations, results of operations, cash flows, liquidity, financial condition or prospects.
−Removed: To the extent we complete our initial Business Combination, we may be affected by numerous risks inherent in the business operations with which we combine.
−Removed: For example, if we combine with a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by the risks inherent in the business and operations of a financially unstable or development stage entity.
−Removed: Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we cannot assure you that we will properly ascertain or assess all of the significant risk factors or that we will have adequate time to complete due diligence.
−Removed: Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
−Removed: We also cannot assure you that an investment in our securities will not ultimately prove to be less favorable to our investors than a direct investment, if such opportunity were available, in a Business Combination target.
−Removed: Accordingly, any shareholder who chooses to remain a shareholder following our initial Business Combination could suffer a reduction in the value of their securities.
−Removed: Such shareholders are unlikely to have a remedy for such reduction in value.
−Removed: We may seek acquisition opportunities outside the biotechnology industry, which may be outside of our management’s areas of expertise.
−Removed: We will consider a Business Combination outside the biotechnology industry and/or our intended subsector focus, which may be outside of our management’s areas of expertise, if a Business Combination candidate is presented to us and we determine that such candidate offers an attractive acquisition opportunity for our company.
−Removed: In the event we elect to pursue such an acquisition, our management’s expertise may not be directly applicable to its evaluation or operation, and our management’s expertise may not be relevant to an understanding of the business that we elect to acquire.
−Removed: As a result, our management may not be able to adequately ascertain or assess all of the significant risk factors relevant to such acquisition.
−Removed: Accordingly, any shareholder who chooses to remain a shareholder following our initial Business Combination could suffer a reduction in the value of their securities.
−Removed: Such shareholders are unlikely to have a remedy for such reduction in value.
−Removed: Although we have identified general criteria and guidelines that we believe are important in evaluating prospective target businesses, we may enter into our initial Business Combination with a target that does not meet such criteria and guidelines, and as a result, the target business with which we enter into our initial Business Combination may not have attributes entirely consistent with our general criteria and guidelines.
−Removed: Although we have identified general criteria and guidelines for evaluating prospective target businesses, it is possible that a target business with which we enter into our initial Business Combination will not have all of these positive attributes.
−Removed: If we complete our initial Business Combination with a target that does not meet some or all of these criteria and guidelines, such combination may not be as successful as a combination with a business that does meet all of our general criteria and guidelines.
−Removed: In addition, if we announce a prospective Business Combination with a target that does not meet our general criteria and guidelines, a greater number of shareholders may exercise their redemption rights, which may make it difficult for us to meet any closing condition with a target business that requires us to have a minimum net worth or a certain amount of cash.
−Removed: In addition, if shareholder approval of the transaction is required by applicable law or stock exchange listing requirements, or we decide to obtain shareholder approval for business or other reasons, it may be more difficult for us to attain shareholder approval of our initial Business Combination if the target business does not meet our general criteria and guidelines.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: We may seek acquisition opportunities with an early stage company, a financially unstable business or an entity lacking an established record of revenue or earnings.
−Removed: To the extent we complete our initial Business Combination with an early stage company, a financially unstable business or an entity lacking an established record of sales or earnings, we may be affected by numerous risks inherent in the operations of the business with which we combine.
−Removed: These risks include investing in a business without a proven product, technology or business model and with limited historical financial data, volatile revenues or earnings, intense competition, difficulties in obtaining and retaining key personnel, scientific challenges and regulatory hurdles.
−Removed: Although our directors and officers will endeavor to evaluate the risks inherent in a particular target business, we may not be able to properly ascertain or assess all of the significant risk factors and we may not have adequate time to complete due diligence.
−Removed: Furthermore, some of these risks may be outside of our control and leave us with no ability to control or reduce the chances that those risks will adversely impact a target business.
−Removed: Any due diligence in connection with an initial Business Combination may not reveal all relevant considerations or liabilities of a target business, which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: We intend to conduct such due diligence as we deem reasonably practicable and appropriate based on the target business and the facts and circumstances applicable to the proposed transaction prior to any initial Business Combination.
−Removed: The objective of the due diligence process will be to identify material issues which might affect the decision to proceed with an initial Business Combination or the consideration payable in connection with such initial Business Combination.
−Removed: We also intend to use information provided during the due diligence process to formulate our business and operational planning for, and valuation of, any target company or business.
−Removed: While conducting due diligence and assessing a potential target business, we will rely on publicly available information (if any), information provided by the relevant target business to the extent provided and, in some circumstances, third-party studies.
−Removed: The due diligence undertaken with respect to a potential initial Business Combination may not reveal all relevant facts that may be necessary to evaluate such transaction or to formulate a business strategy.
−Removed: Furthermore, the information provided during due diligence may not be adequate or accurate.
−Removed: As part of the due diligence process, we will also make subjective judgments regarding the results of operations, financial condition and prospects of a potential initial Business Combination, and these judgments may be inaccurate.
−Removed: In pursuing our acquisition strategy, we may seek to effectuate our initial Business Combination with a privately held company.
−Removed: Very little public information generally exists about private companies, and we could be required to make our decision on whether to pursue a potential initial business combination on the basis of limited information, which may result in a Business Combination with a company that is not as profitable as we suspected, if at all.
−Removed: Due diligence conducted in connection with an initial Business Combination may not result in the initial Business Combination being successful.
−Removed: If the due diligence investigation fails to identify material information regarding an opportunity, or if we consider such material risks to be commercially acceptable relative to the opportunity, and we proceed with an initial Business Combination, our company may subsequently incur substantial impairment charges or other losses.
−Removed: In addition, following an initial Business Combination, we may be subject to significant, previously undisclosed liabilities of the acquired business that were not identified during due diligence and which could have a material adverse effect on our business, financial condition, results of operations and prospects.
−Removed: We are not required to obtain an opinion regarding fairness.
−Removed: Consequently, you may have no assurance from an independent source that the price we are paying for the business is fair to our company from a financial point of view.
−Removed: Unless we complete our initial Business Combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial point of view.
−Removed: If no opinion is obtained, our shareholders will be relying on the judgment of our board of directors, which will determine fair market value based on standards generally accepted by the financial community.
−Removed: Such standards used will be disclosed in our tender offer documents or proxy solicitation materials, as applicable, related to our initial Business Combination.
−Removed: We may engage the underwriters from our Initial Public Offering or any of their affiliates to provide additional services to us.
−Removed: The underwriters are entitled to receive deferred commissions that will be released from the trust only on a completion of an initial Business Combination.
−Removed: These financial incentives may cause the underwriters to have potential conflicts of interest in rendering any such additional services to us after the Initial Public Offering.
−Removed: We may engage the underwriters from our Initial Public Offering or any of their affiliates to provide additional services to us, including, for example, identifying potential targets, providing financial advisory services, acting as a placement agent in a private offering or arranging debt financing.
−Removed: We may pay the underwriters or any of their affiliates fair and reasonable fees or other compensation that would be determined at that time in an arm’s length negotiation.
−Removed: The underwriters are also entitled to receive deferred commissions that are conditioned on the completion of an initial Business Combination.
−Removed: The fact that the underwriters or any of their affiliates’ financial interests are tied to the consummation of a business combination transaction may give rise to potential conflicts of interest in providing any such additional services to us, including potential conflicts of interest in connection with the sourcing and consummation of an initial Business Combination.
−Removed: We may issue additional Class A ordinary shares or preferred shares to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination.
−Removed: We may also issue Class A ordinary shares upon the conversion of the Class B ordinary shares at a ratio greater than one-to-one
−Removed: at the time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association.
−Removed: Any such issuances would dilute the interest of our shareholders and likely present other risks.
−Removed: Our amended and restated memorandum and articles of association authorizes the issuance of up to 500,000,000 Class A ordinary shares, par value $0.0001 per share, 50,000,000 Class B ordinary shares, par value $0.0001 per share, and 5,000,000 undesignated preferred shares, par value $0.0001 per share.
−Removed: As of December 31, 2021, there were 474,360,000 and 43,750,000 authorized but unissued Class A ordinary shares and Class B ordinary shares, respectively, available for issuance, which amount does not take into account shares reserved for issuance upon conversion of the Class B ordinary shares.
−Removed: Class B ordinary shares are convertible into Class A ordinary shares, initially at a one-for-one
−Removed: ratio but subject to adjustment as set forth herein and in our amended and restated memorandum and articles of association, including in certain circumstances in which we issue additional Class A ordinary shares or equity-linked securities in connection with our initial business combination.
−Removed: As of December 31, 2021, there were no preferred shares issued and outstanding.
−Removed: We may issue a substantial number of additional Class A ordinary shares, and may issue preferred shares, in order to complete our initial Business Combination or under an employee incentive plan after completion of our initial Business Combination.
−Removed: We may also issue Class A ordinary shares upon conversion of the Class B ordinary shares at a ratio greater than one-to-one
−Removed: at the time of our initial Business Combination as a result of the anti-dilution provisions contained in our amended and restated memorandum and articles of association.
−Removed: However, our amended and restated memorandum and articles of association provide, among other things, that prior to our initial Business Combination, we may not issue additional ordinary shares that would entitle the holders thereof to (1) receive funds from the Trust Account or (2) vote as a class with our public shares on any initial Business Combination.
−Removed: The issuance of additional ordinary shares or preferred shares:
−Removed: • may significantly dilute the equity interest of our public investors, which dilution would increase if the anti-dilution provisions in the Class B ordinary shares resulted in the issuance of Class A ordinary shares on a greater than one-to-one
−Removed: basis upon conversion of the Class B ordinary shares;
−Removed: • may subordinate the rights of holders of ordinary shares if preferred shares are issued with rights senior to those afforded our ordinary shares;
−Removed: • could cause a change of control if a substantial number of our ordinary shares is issued, which may affect, among other things, our ability to use our net operating loss carry forwards, if any, and could result in the resignation or removal of our present directors and officers;
−Removed: • may have the effect of delaying or preventing a change of control of us by diluting the share ownership or voting rights of a person seeking to obtain control of us;
−Removed: • may adversely affect prevailing market prices for our ordinary shares.
−Removed: Our initial Business Combination may involve a jurisdiction that could impose taxes on shareholders.
−Removed: We may, subject to requisite shareholder approval by special resolution under the Companies Act, effect a Business Combination with a target company in another jurisdiction, reincorporate in the jurisdiction in which the target company or business is located, or reincorporate in another jurisdiction.
−Removed: Such transactions may result in tax liability for a shareholder in the jurisdiction in which the shareholder is a tax resident (or in which its members are resident if it is a tax transparent entity), in which the target company is located, or in which we reincorporate (or otherwise result in adverse tax consequences).
−Removed: In the event of a reincorporation pursuant to our initial Business Combination, such tax liability may attach prior to any consummation of redemptions.
−Removed: We do not intend to make any cash distributions to shareholders to pay such taxes.
−Removed: Resources could be wasted in researching acquisitions that are not completed, which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less than such amount in certain circumstances, on the liquidation of our Trust Account.
−Removed: We anticipate that the investigation of each specific target business and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others.
−Removed: If we decide not to complete a specific initial Business Combination, the costs incurred up to that point for the proposed transaction likely would not be recoverable.
−Removed: Furthermore, if we reach an agreement relating to a specific target business, we may fail to complete our initial Business Combination for any number of reasons including those beyond our control.
−Removed: Any such event will result in a loss to us of the related costs incurred which could materially adversely affect subsequent attempts to locate and acquire or merge with another business.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: We may engage in a Business Combination with one or more target businesses that have relationships with entities that may be affiliated with our Sponsor, directors or officers, which may raise potential conflicts of interest.
−Removed: In light of the involvement of our Sponsor, directors and officers with other entities, we may decide to acquire one or more businesses affiliated with our Sponsor, directors and officers.
−Removed: Our directors and officers also serve as officers and/or board members for other entities, including those described under “Item 10.
−Removed: Directors, Executive Officer and Corporate Governance — Conflicts of Interest.” Such entities, including IPOD, IPOF, the Other SCS SPACs (each of the Other SCS SPACs is focused on pursuing an initial business combination with a target operating in the biotechnology industry) and any other blank check companies sponsored by Social Capital, may compete with us for Business Combination opportunities.
−Removed: We may pursue a Business Combination with an affiliated entity if we determined that such affiliated entity met our criteria and guidelines for a Business Combination and such transaction was approved by a majority of our independent and disinterested directors.
−Removed: Despite our agreement that we, or a committee of independent and disinterested directors, will obtain an opinion from an independent investment banking firm or another valuation or appraisal firm that regularly renders fairness opinions on the type of target business we are seeking to acquire, regarding the fairness to our company from a financial point of view of a Business Combination with one or more businesses affiliated with our Sponsor, directors or officers, potential conflicts of interest still may exist and, as a result, the terms of the Business Combination may not be as advantageous to our public shareholders as they would be absent any conflicts of interest.
−Removed: Failure to maintain our status as tax resident solely in the Cayman Islands could adversely affect our financial and operating results.
−Removed: Our intention is that prior to our initial Business Combination we should be resident solely in the Cayman Islands.
−Removed: Continued attention must be paid to ensure that major decisions by the Company are not made from another jurisdiction, since this could cause us to lose our status as tax resident solely in the Cayman Islands.
−Removed: The composition of the Board, the place of residence of the individual members of the Board and the location(s) in which the Board makes decisions will all be important factors in determining and maintaining our tax residence in the Cayman Islands.
−Removed: If we were to be considered as tax resident within another jurisdiction, we may be subject to additional tax in that jurisdiction, which could negatively affect our financial and operating results, and/or our shareholders’ investment returns could be subject to additional or increased taxes (including withholding taxes).
−Removed: Since our initial shareholders will lose their entire investment in us if our initial Business Combination is not completed, a conflict of interest may arise in determining whether a particular Business Combination target is appropriate for our initial Business Combination.
−Removed: Our initial shareholders collectively beneficially own all 6,250,000 founder shares, for which they paid an aggregate amount of $25,000.
−Removed: The founder shares will be worthless if we do not complete an initial Business Combination.
−Removed: In addition, our Sponsor beneficially owns an aggregate of 640,000 private placement shares for which it paid an aggregate amount of $6,400,000 in the aggregate, or $10.00 per share, that will also be worthless if we do not complete a Business Combination.
−Removed: The personal and financial interests of our Sponsor, directors and officers may influence their motivation in identifying and selecting a target Business Combination, completing an initial Business Combination and influencing the operation of the business following the initial Business Combination.
−Removed: This risk may become more acute as the 24-month
−Removed: deadline following the closing of the Initial Public Offering nears, which is the current deadline for the completion of our initial Business Combination.
−Removed: The value of the founder shares following completion of our initial Business Combination is likely to be substantially higher than the nominal price paid for them, even if the trading price of our ordinary at such time is substantially less than $10.00 per share.
−Removed: Our Sponsor has invested in us an aggregate of $6,425,000 (not including any advances), comprised of the $25,000 purchase price for the founder shares and the $6,400,000 purchase price for the private placement shares.
−Removed: Assuming a trading price of $10.00 per share upon consummation of our initial Business Combination, the 6,250,000 founder shares and 640,000 private placement shares would have an aggregate implied value of $68,900,000.
−Removed: Even if the trading price of our ordinary shares were as low as $0.93 per share, the aggregate value of the founder shares and private placement shares would be equal to the sponsor’s initial investment in us.
−Removed: As a result, our Sponsor is likely to be able to make a substantial profit on its investment in us at a time when our public shares have lost significant value.
−Removed: Accordingly, our management team, some of whom own interests in our Sponsor, may be more willing to pursue a business combination with a riskier or less-established target business than would be the case if our Sponsor had paid the same per share price for the founder shares as our public shareholders paid for their public shares.
−Removed: In order to effectuate an initial business combination, special purpose acquisition companies have, in the past, amended various provisions of their charters and modified governing instruments.
−Removed: We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments in a manner that will make it easier for us to complete our initial business combination that some of our shareholders may not support.
−Removed: In order to effectuate an initial business combination, special purpose acquisition companies have, in the recent past, amended various provisions of their charters and modified governing instruments.
−Removed: For example, special purpose acquisition check companies have amended the definition of business combination, increased redemption thresholds and extended the time to consummate an initial business combination.
−Removed: Amending our amended and restated memorandum and articles of association requires at least a special resolution of our shareholders as a matter of Cayman Islands law.
−Removed: A resolution is deemed to be a special resolution as a matter of Cayman Islands law where it has been approved either (1) by holders of at least two-thirds
−Removed: (or any higher threshold specified in a company’s articles of association) of a company’s ordinary shares at a general meeting for which notice specifying the intention to propose the resolution as a special resolution has been given or (2) if so authorized by a company’s articles of association, by a unanimous written resolution of all of the company’s shareholders.
−Removed: Our amended and restated memorandum and articles of association provide that special resolutions must be approved either by holders of at least two-thirds
−Removed: of our ordinary shares who attend and vote at a general meeting (i.e., the lowest threshold permissible under Cayman Islands law) (other than amendments relating to provisions governing the appointment or removal of directors prior to our initial business combination, which require the approval of the holders of at least 90% of our ordinary shares attending and voting in a general meeting), or by a unanimous written resolution of all of our shareholders.
−Removed: We cannot assure you that we will not seek to amend our amended and restated memorandum and articles of association or governing instruments or extend the time to consummate an initial business combination in order to effectuate our initial Business Combination.
−Removed: We may issue notes or other debt securities, or otherwise incur substantial debt, to complete a Business Combination, which may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
−Removed: We may choose to incur substantial debt to complete our initial Business Combination.
−Removed: We have agreed that we will not incur any indebtedness unless we have obtained from the lender a waiver of any right, title, interest or claim of any kind in or to the monies held in the Trust Account.
−Removed: Nevertheless, the incurrence of debt could have a variety of negative effects, including:
−Removed: • default and foreclosure on our assets if our operating revenues after an initial Business Combination are insufficient to repay our debt obligations;
−Removed: • acceleration of our obligations to repay the indebtedness even if we make all principal and interest payments when due if we breach certain covenants that require the maintenance of certain financial ratios or reserves without a waiver or renegotiation of that covenant;
−Removed: • our immediate payment of all principal and accrued interest, if any, if the debt is payable on demand;
−Removed: • our inability to obtain necessary additional financing if the debt contains covenants restricting our ability to obtain such financing while the debt is outstanding;
−Removed: • our inability to pay dividends on our ordinary shares;
−Removed: • using a substantial portion of our cash flow to pay principal and interest on our debt, which will reduce the funds available for dividends on our ordinary shares if declared, expenses, capital expenditures, acquisitions and other general corporate purposes;
−Removed: • limitations on our flexibility in planning for and reacting to changes in our business and in the industry in which we operate;
−Removed: • increased vulnerability to adverse changes in general economic, industry and competitive conditions and adverse changes in government regulation;
−Removed: • limitations on our ability to borrow additional amounts for expenses, capital expenditures, acquisitions, debt service requirements, execution of our strategy and other purposes and other disadvantages compared to our competitors who have less debt.
−Removed: We may be able to complete only one Business Combination with the proceeds of the Initial Public Offering and the sale of the private placement shares, which will cause us to be solely dependent on a single business which may have a limited number of products or services.
−Removed: This lack of diversification may negatively impact our operations and profitability.
−Removed: We may effectuate our initial Business Combination with a single target business or multiple target businesses simultaneously or within a short period of time.
−Removed: However, we may not be able to effectuate our initial Business Combination with more than one target business because of various factors, including the existence of complex accounting issues and the requirement that we prepare and file pro forma financial statements with the SEC that present operating results and the financial condition of several target businesses as if they had been operated on a combined basis.
−Removed: By completing our initial Business Combination with only a single entity our lack of diversification may subject us to numerous financial, economic, competitive and regulatory risks.
−Removed: Further, we would not be able to diversify our operations or benefit from the possible spreading of risks or offsetting of losses, unlike other entities which may have the resources to complete several Business Combinations in different industries or different areas of a single industry.
−Removed: Accordingly, the prospects for our success may be:
−Removed: • solely dependent upon the performance of a single business, property or asset;
−Removed: • dependent upon the development or market acceptance of a single or limited number of products, processes, technologies or services.
−Removed: This lack of diversification may subject us to numerous financial, economic, competitive and regulatory risks, any or all of which may have a substantial adverse impact upon the particular industry in which we may operate subsequent to our initial Business Combination.
−Removed: We may attempt to simultaneously complete Business Combinations with multiple prospective targets, which may hinder our ability to complete our initial Business Combination and give rise to increased costs and risks that could negatively impact our operations and profitability.
−Removed: If we determine to simultaneously acquire several businesses that are owned by different sellers, we will need each such seller to agree that our purchase of its business is contingent on the simultaneous closing of the other Business Combinations, which may make it more difficult for us, and delay our ability, to complete our initial Business Combination.
−Removed: With multiple Business Combinations, we could also face additional risks, including additional burdens and costs with respect to possible multiple negotiations and due diligence investigations (if there are multiple sellers) and the additional risks associated with the subsequent assimilation of the operations and services or products of the acquired companies in a single operating business.
−Removed: If we are unable to adequately address these risks, it could negatively impact our profitability and results of operations.
−Removed: We do not have a specified maximum redemption threshold.
−Removed: The absence of such a redemption threshold may make it possible for us to complete a Business Combination with which a substantial majority of our shareholders do not agree.
−Removed: Our amended and restated memorandum and articles of association do not provide a specified maximum redemption threshold, except that in no event will we redeem our public shares in an amount that would cause our net tangible assets to be less than $5,000,001 following such redemptions, or any greater net tangible asset or cash requirement that may be contained in the agreement relating to our initial Business Combination.
−Removed: In addition, our proposed initial Business Combination may impose a minimum cash requirement for (i) cash consideration to be paid to the target or its owners, (ii) cash for working capital or other general corporate purposes or (iii) the retention of cash to satisfy other conditions.
−Removed: As a result, we may be able to complete our initial Business Combination even though a substantial majority of our public shareholders do not agree with the transaction and have redeemed their shares or, if we seek shareholder approval of our initial Business Combination and do not conduct redemptions in connection with our initial Business Combination pursuant to the tender offer rules, have entered into privately negotiated agreements to sell their shares to our Sponsor, directors, officers, advisors or any of their respective affiliates.
−Removed: In the event the aggregate cash consideration we would be required to pay for all public shares that are validly submitted for redemption plus any amount required to satisfy cash conditions pursuant to the terms of the proposed Business Combination exceed the aggregate amount of cash available to us, we will not complete the Business Combination or redeem any shares, and all ordinary shares submitted for redemption will be returned to the holders thereof, and we instead may search for an alternate Business Combination.
−Removed: Certain provisions of our amended and restated memorandum and articles of association that relate to our pre-Business
−Removed: Combination activity (and corresponding provisions of the agreement governing the release of funds from our Trust Account) may be amended with the approval of holders of at least two-thirds
−Removed: of our ordinary shares who attend and vote at a general meeting, which is a lower amendment threshold than that of some other blank check companies.
−Removed: It may be easier for us, therefore, to amend our amended and restated memorandum and articles of association and the trust agreement to facilitate the completion of an initial Business Combination that some of our shareholders may not support.
−Removed: Some other blank check companies have a provision in their charter which prohibits the amendment of certain of its provisions, including those which relate to a company’s pre-Business
−Removed: Combination activity, without approval by holders of a certain percentage of the company’s shares.
−Removed: In certain of those companies, amendment of these provisions requires approval by holders holding between 90% and 100% of the company’s public shares.
−Removed: Our amended and restated memorandum and articles of association provide that any of its provisions, including those related to pre-Business
−Removed: Combination activity (including the requirement to deposit proceeds of the Initial Public Offering and the sale of private placement shares into the Trust Account and not release such amounts except in specified circumstances), may be amended if approved by holders of at least two-thirds
−Removed: of our ordinary shares who attend and vote at a general meeting, and corresponding provisions of the trust agreement governing the release of funds from our Trust Account may be amended if approved by holders of 65% of our ordinary shares (other than amendments relating to provisions governing the appointment or removal of directors prior to our initial Business Combination, which require the approval of the holders of at least 90% of our ordinary shares attending and voting in a general meeting).
−Removed: Our initial shareholders, who collectively beneficially own approximately 21.6% of our ordinary shares, may participate in any vote to amend our amended and restated memorandum and articles of association and/or trust agreement and will have the discretion to vote in any manner they choose.
−Removed: As a result, we may be able to amend the provisions of our amended and restated memorandum and articles of association which govern our pre-Business
−Removed: Combination behavior more easily than some other blank check companies, and this may increase our ability to complete our initial Business Combination with which you do not agree.
−Removed: In certain circumstances, our shareholders may pursue remedies against us for any breach of our amended and restated memorandum and articles of association.
−Removed: We may be unable to obtain additional financing to complete our initial Business Combination or to fund the operations and growth of a target business, which could compel us to restructure or abandon a particular Business Combination.
−Removed: If the net proceeds of the Initial Public Offering and the sale of the private placement shares prove to be insufficient, either because of the size of our initial Business Combination, the depletion of the available net proceeds in search of a target business, the obligation to redeem for cash a significant number of shares from shareholders who elect redemption in connection with our initial Business Combination or the terms of negotiated transactions to purchase shares in connection with our initial Business Combination, we may be required to seek additional financing or to abandon the proposed Business Combination.
−Removed: We cannot assure you that such financing will be available on acceptable terms, if at all.
−Removed: To the extent that additional financing proves to be unavailable when needed to complete our initial Business Combination, we would be compelled to either restructure the transaction or abandon that particular Business Combination and seek an alternative target business candidate.
−Removed: In addition, even if we do not need additional financing to complete our initial Business Combination, we may require such financing to fund the operations or growth of the target business.
−Removed: The failure to secure additional financing could have a material adverse effect on the continued development or growth of the target business.
−Removed: None of our directors, officers or shareholders is required to provide any financing to us in connection with or after our initial Business Combination.
−Removed: If we have not completed our initial Business Combination within the required time period, our public shareholders may receive only approximately $10.00 per share, or less in certain circumstances, on the liquidation of our Trust Account.
−Removed: Our initial shareholders will control the election of our board of directors until consummation of our initial Business Combination and will hold a substantial interest in us.
−Removed: As a result, they will appoint all of our directors prior to our initial Business Combination and may exert a substantial influence on actions requiring shareholder vote, potentially in a manner that you do not support.
−Removed: Our initial shareholders beneficially own approximately 21.6% of our issued and outstanding ordinary shares.
−Removed: In addition, prior to our initial Business Combination, holders of the founder shares will have the right to appoint all of our directors and may remove members of our board of directors for any reason.
−Removed: Holders of our Class A ordinary shares will have no right to vote on the appointment of directors during such time.
−Removed: These provisions of our amended and restated memorandum and articles of association may only be amended by a special resolution passed by the holders of at least 90% of our ordinary shares attending and voting in a general meeting.
−Removed: As a result, you will not have any influence over the appointment of directors prior to our initial Business Combination.
−Removed: In addition, as a result of their substantial ownership in our company, our initial shareholders may exert a substantial influence on other actions requiring a shareholder vote, potentially in a manner that you do not support, including amendments to our amended and restated memorandum and articles of association and approval of major corporate transactions.
−Removed: If our initial shareholders purchase any Class A ordinary shares in the open market or in privately negotiated transactions, this would increase their influence over these actions.
−Removed: Accordingly, our initial shareholders will exert significant influence over actions requiring a shareholder vote at least until the completion of our initial Business Combination.
−Removed: Our founder shares and private placement shares issuable upon conversion of working capital loans may have an adverse effect on the market price of our Class A ordinary shares and make it more difficult to effectuate our initial Business Combination.
−Removed: Our initial shareholders currently beneficially own an aggregate of 6,250,000 Class B ordinary shares.
−Removed: The Class B ordinary shares are convertible into Class A ordinary shares on a one-for-one
−Removed: basis, subject to adjustment as set forth herein.
−Removed: In addition, if our Sponsor, an affiliate of our Sponsor or certain of our directors and officers make any working capital loans, up to $1,500,000 of such loans may be in the form of convertible loans.
−Removed: Such convertible loans would be convertible into shares of the post-Business Combination entity, at a price of $10.00 per share, at the option of the lender.
−Removed: The shares would be identical to the private placement shares.
−Removed: To the extent we issue Class A ordinary shares to effectuate a Business Combination, the potential for the issuance of a substantial number of additional Class A ordinary shares upon exercise of these conversion rights could make us a less attractive acquisition vehicle to a target business.
−Removed: Any such issuance will increase the number of issued and outstanding Class A ordinary shares and reduce the value of the Class A ordinary shares issued to complete the Business Combination.
−Removed: Therefore, our founder shares and private placement shares issuable upon conversion of working capital loans may make it more difficult to effectuate a Business Combination or increase the cost of acquiring the target business.
−Removed: Because we must furnish our shareholders with target business financial statements, we may lose the ability to complete an otherwise advantageous initial Business Combination with some prospective target businesses.
−Removed: The federal proxy rules require that a proxy statement with respect to a vote on a Business Combination meeting certain financial significance tests include historical and/or pro forma financial statement disclosure in periodic reports.
−Removed: We will include the same financial statement disclosure in connection with our tender offer documents, whether or not they are required under the tender offer rules.
−Removed: These financial statements may be required to be prepared in accordance with, or be reconciled to, accounting principles generally accepted in the United States of America, or GAAP, or international financial reporting standards as issued by the International Accounting Standards Board, or IFRS, depending on the circumstances and the historical financial statements may be required to be audited in accordance with the standards of the Public Company Accounting Oversight Board (United States), or PCAOB.
−Removed: These financial statement requirements may limit the pool of potential target businesses we may acquire because some targets may be unable to provide such financial statements in time for us to disclose such financial statements in accordance with federal proxy rules and complete our initial Business Combination within the prescribed time frame.
−Removed: Compliance obligations under the Sarbanes-Oxley Act, may make it more difficult for us to effectuate our initial Business Combination, require substantial financial and management resources, and increase the time and costs of completing an acquisition.
−Removed: Section 404 of the Sarbanes-Oxley Act requires that we evaluate and report on our system of internal controls beginning with our Annual Report on Form 10-K
−Removed: for the year ending December 31, 2022.
−Removed: Only in the event we are deemed to be a large accelerated filer or an accelerated filer, and no longer qualify as an emerging growth company, will we be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting.
−Removed: The fact that we are a blank check company makes compliance with the requirements of the Sarbanes-Oxley Act particularly burdensome on us as compared to other public companies because a target business with which we seek to complete our initial Business Combination may not be in compliance with the provisions of the Sarbanes-Oxley Act regarding adequacy of its internal controls.
−Removed: The development of the internal control of any such entity to achieve compliance with the Sarbanes-Oxley Act may increase the time and costs necessary to complete any such acquisition.
−Removed: If our management team pursues a company with operations or opportunities outside of the United States for our initial Business Combination, we may face additional burdens in connection with investigating, agreeing to and completing such combination, and if we effect such initial Business Combination, we would be subject to a variety of additional risks that may negatively impact our operations.
−Removed: If our management team pursues a company with operations or opportunities outside of the United States for our initial Business Combination, we would be subject to risks associated with cross-border Business Combinations, including in connection with investigating, agreeing to and completing our initial Business Combination, conducting due diligence in a foreign market, having such transaction approved by any local governments, regulators or agencies and changes in the purchase price based on fluctuations in foreign exchange rates.
−Removed: If we effect our initial Business Combination with such a company, we would be subject to any special considerations or risks associated with companies operating in an international setting (including how relevant governments respond to such factors), including any of the following:
−Removed: costs and difficulties inherent in managing cross-border business operations and complying with commercial, legal and regulatory requirements of overseas markets;
−Removed: rules and regulations regarding currency redemption;
−Removed: complex corporate withholding taxes on individuals;
−Removed: laws governing the manner in which future Business Combinations may be effected;
−Removed: tariffs and trade barriers;
−Removed: regulations related to customs and import/export matters;
−Removed: longer payment cycles;
−Removed: tax consequences, such as tax law changes, including termination or reduction of tax and other incentives that the applicable government provides to domestic companies, and variations in tax laws as compared to the United States;
−Removed: currency fluctuations and exchange controls, including devaluations and other exchange rate movements;
−Removed: rates of inflation, price instability and interest rate fluctuations;
−Removed: liquidity of domestic capital and lending markets;
−Removed: challenges in collecting accounts receivable;
−Removed: cultural and language differences;
−Removed: employment regulations;
−Removed: healthcare and data privacy regulations;
−Removed: energy shortages;
−Removed: changes in industry, regulatory or environmental standards within the jurisdictions where we operate;
−Removed: public health or safety concerns and related governmental restrictions, including those caused by outbreaks of disease such as the COVID-19
−Removed: crime, strikes, riots, civil disturbances, terrorist attacks, natural disasters, wars and other forms of social instability;
−Removed: deterioration of political relations with the United States;
−Removed: obligatory military service by personnel;
−Removed: government appropriation of assets.
−Removed: We may not be able to adequately address these additional risks.
−Removed: If we were unable to do so, we may be unable to complete such combination or, if we complete such combination, our operations might suffer, either of which may adversely impact our results of operations and financial condition.
−Removed: Risks Relating to the Post-Business Combination Company
−Removed: We may face risks related to companies in the biotechnology industry.
−Removed: Business combinations with companies in the biotechnology industry entail special considerations and risks.
−Removed: If we are successful in completing a Business Combination with such a target business, we may be subject to, and possibly adversely affected by, the following risks:
−Removed: rapid technological development and significant competition from other biopharmaceutical and biotechnology companies, academic institutions, government agencies and research organizations, many of which have substantially greater resources than we do;
−Removed: need for substantial additional funding to complete development of product candidates, which may not be available on favorable terms or at all;
−Removed: difficulty in predicting the timing and cost of product candidate development;
−Removed: lengthy and uncertain preclinical testing and clinical development processes, which may not support further development, yield regulatory approval or lead to commercially viable products;
−Removed: inability to secure and maintain regulatory and marketing approvals for product candidates;
−Removed: significant liability exposure, including as a result of serious adverse events, undesirable side effects or other unexpected properties of product candidates;
−Removed: inability to successfully develop or commercialize product candidates, including failure to achieve market acceptance by physicians, patients, hospitals, treatment centers, third-party payors and the broader medical community and failure to reach profitability;
−Removed: inability to secure and maintain intellectual property rights and patent and trade secret protection for biotechnology and product candidates;
−Removed: liability for intellectual property infringement or other claims based on the nature of our business;
−Removed: delays in production or manufacturing of clinical supply;
−Removed: reliance on supply and regulatory status of third-party drugs used in combination with product candidates;
−Removed: inability to rely on previous findings of safety and efficacy for similar approved products and published scientific literature;
−Removed: delays or failures related to the Covid-19 pandemic,
−Removed: which may result in clinical site closures, delays to patient enrollment, discontinued treatment and changes to trial protocols;
−Removed: failure to secure adequate coverage, reimbursement and payment rates for product candidates from government or third-party payors;
−Removed: inability to adapt to healthcare legislative reform measures;
−Removed: failure to comply with applicable regulations, including with respect to data privacy and security;
−Removed: reliance on third-party vendors or service providers;
−Removed: disruption or failure of our networks, systems or technology;
−Removed: inability to attract, hire and retain experienced research and development, clinical, commercial, operational and support personnel;
−Removed: significant costs and expenses associated with operating our business and being a public company.
−Removed: Any of the foregoing could have an adverse impact on our operations following a Business Combination.
−Removed: However, our efforts in identifying prospective target businesses will not be limited to the biotechnology industry or our proposed subsector focus therein.
−Removed: Accordingly, if we acquire a target business in another industry, we will be subject to risks attendant with the specific industry in which we operate or target business which we acquire, which may or may not be different than those risks listed above.
−Removed: For risk factors related to the proposed ProKidney Business Combination, see the “Risk Factors” section of the ProKidney Disclosure Statement that we have filed with the SEC.
−Removed: Subsequent to our completion of our initial Business Combination, we may be required to take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on our financial condition, results of operations and the price of our securities, which could cause you to lose some or all of your investment.
−Removed: Even if we conduct extensive due diligence on a target business with which we combine, we cannot assure you that this diligence will identify all material issues that may be present with a particular target business that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of the target business and outside of our control will not later arise.
−Removed: As a result of these factors, we may be forced to later write down or write off assets, restructure our operations, or incur impairment or other charges that could result in our reporting losses.
−Removed: Even if our due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with our preliminary risk analysis.
−Removed: Even though these charges may be non-cash
−Removed: items and not have an immediate impact on our liquidity, the fact that we report charges of this nature could contribute to negative market perceptions about us or our securities.
−Removed: In addition, charges of this nature may cause us to violate net worth or other covenants to which we may be subject as a result of assuming pre-existing
−Removed: debt held by a target business or by virtue of our obtaining post-combination debt financing.
−Removed: Accordingly, any shareholder who chooses to remain a shareholder following our initial Business Combination could suffer a reduction in the value of their securities.
−Removed: Such shareholders are unlikely to have a remedy for such reduction in value.
−Removed: After our initial Business Combination, our results of operations and prospects could be subject, to a significant extent, to the economic, political and social, developments and conditions as well as government policies, in the country in which we operate.
−Removed: The economic, political and social developments and conditions, as well as government policies, of the country in which our operations are located could affect our business.
−Removed: Economic growth could be uneven, both geographically and among various sectors of the economy and such growth may not be sustained in the future.
−Removed: If in the future such country’s economy experiences a downturn or grows at a slower rate than expected, there may be less demand for spending in certain industries.
−Removed: A decrease in demand for spending in certain industries could materially and adversely affect our ability to find an attractive target business with which to consummate our initial Business Combination and if we effect our initial Business Combination, the ability of that target business to become profitable.
−Removed: Our management may not be able to maintain control of a target business after our initial Business Combination.
−Removed: We cannot provide assurance that, upon loss of control of a target business, new management will possess the skills, qualifications or abilities necessary to profitably operate such business.
−Removed: We may structure our initial Business Combination so that the post-transaction company in which our public shareholders own shares will own less than 100% of the equity interests or assets of a target business, but we will complete such Business Combination only if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling interest in the target business sufficient for us not to be required to register as an investment company under the Investment Company Act.
−Removed: We will not consider any transaction that does not meet such criteria.
−Removed: Even if the post-transaction company owns 50% or more of the voting securities of the target, our shareholders prior to our initial Business Combination may collectively own a minority interest in the post Business Combination company, depending on valuations ascribed to the target and us in our initial Business Combination transaction.
−Removed: For example, we could pursue a transaction in which we issue a substantial number of new ordinary shares in exchange for all of the issued and outstanding capital stock, shares or other equity securities of a target, or issue a substantial number of new shares to third-parties in connection with financing our initial Business Combination.
−Removed: In this case, we would acquire a 100% interest in the target.
−Removed: However, as a result of the issuance of a substantial number of new ordinary shares, our shareholders immediately prior to such transaction could own less than a majority of our issued and outstanding ordinary shares subsequent to such transaction.
−Removed: In addition, other minority shareholders may subsequently combine their holdings resulting in a single person or group obtaining a larger share of our shares than we initially acquired.
−Removed: Accordingly, this may make it more likely that our management will not be able to maintain our control of the target business.
−Removed: We may have limited ability to assess the management of a prospective target business and, as a result, may affect our initial Business Combination with a target business whose management may not have the skills, qualifications or abilities to manage a public company.
−Removed: When evaluating the desirability of effecting our initial Business Combination with a prospective target business, our ability to assess the target business’s management may be limited due to a lack of time, resources or information.
−Removed: Our assessment of the capabilities of the target’s management, therefore, may prove to be incorrect and such management may lack the skills, qualifications or abilities we suspected.
−Removed: Should the target’s management not possess the skills, qualifications or abilities necessary to manage a public company, the operations and profitability of the post-combination business may be negatively impacted.
−Removed: Accordingly, any shareholder who chooses to remain a shareholder following our initial Business Combination could suffer a reduction in the value of their securities.
−Removed: Such shareholders are unlikely to have a remedy for such reduction in value.
−Removed: The directors and officers of an acquisition candidate may resign upon completion of our initial Business Combination.
−Removed: The departure of a Business Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an acquisition candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with us following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: After our initial Business Combination, it is possible that a majority of our directors and officers will live outside the United States and all or substantially all of our assets will be located outside the United States;
−Removed: therefore investors may not be able to enforce federal securities laws or their other legal rights.
−Removed: It is possible that after our initial Business Combination, a majority of our directors and officers will reside outside of the United States and all or substantially all of our assets will be located outside of the United States.
−Removed: As a result, it may be difficult, or in some cases not possible, for investors in the United States to enforce their legal rights, to effect service of process upon all of our directors or officers or to enforce judgments of United States courts predicated upon civil liabilities and criminal penalties on our directors and officers under United States laws.
−Removed: If our management following our initial Business Combination is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws, which could lead to various regulatory issues.
−Removed: Following our initial Business Combination, any or all of our management could resign from their positions as officers of the company, and the management of the target business at the time of the Business Combination could remain in place.
−Removed: Management of the target business may not be familiar with U.S.
−Removed: securities laws.
−Removed: If new management is unfamiliar with U.S.
−Removed: securities laws, they may have to expend time and resources becoming familiar with such laws.
−Removed: This could be expensive and time-consuming and could lead to various regulatory issues which may adversely affect our operations.
−Removed: Risks Relating To Our Management Team and Conflicts of Interest
−Removed: Certain members of our management team and affiliated companies are, have been, and may from time to time be, associated with negative media coverage or public actions or become involved in legal proceedings or governmental investigations unrelated to our business.
−Removed: Members of our management team have been involved in a wide variety of businesses.
−Removed: Such involvement has, and may lead to, media coverage and public awareness.
−Removed: As a result of such involvement, certain members of our management team and affiliated companies are, have been, and may from time to time be, involved in legal proceedings or governmental investigations unrelated to our business, and may be exposed to reputational risks resulting from other events such as allegations of misconduct or other negative publicity or press speculation, whether or not accurate.
−Removed: For example, in February 2021, Clover Health, which merged with IPOC, received a letter from the SEC indicating that it is conducting an investigation and requesting document and data preservation from January 1, 2020 relating to certain matters that were referenced in an article by Hindenburg Research, and certain shareholders of Clover Health have also brought civil suits against Mr.
−Removed: Palihapitiya in his capacity as Chairman and Chief Executive Officer of IPOC for alleged breaches of fiduciary duty, unjust enrichment, corporate waste and violations of federal securities laws, in connection with IPOC’s business combination with Clover Health.
−Removed: Any such media coverage, public action, legal proceedings or investigations may be detrimental to our or our management team’s reputation and could negatively affect our ability to identify and complete an initial business combination and may have an adverse effect on the price of our securities or on our business, financial condition, results of operations and prospects.
−Removed: We are dependent upon our directors and officers and their departure could adversely affect our ability to operate.
−Removed: Our operations are dependent upon a relatively small group of individuals and in particular, Mr.
−Removed: Palihapitiya, Chairman of our board of directors and our Chief Executive Officer, and Mr.
−Removed: Mehta, our President and one of our directors.
−Removed: We believe that our success depends on the continued service of our directors and officers, at least until we have completed our initial Business Combination.
−Removed: In addition, our directors and officers are not required to commit any specified amount of time to our affairs, including our management team who will be spending material business time on their other duties, and, accordingly, will have conflicts of interest in allocating their time among various business activities, including identifying potential Business Combinations and monitoring the related due diligence.
−Removed: Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our Sponsor are the investment managers.
−Removed: We do not have an employment agreement with, or key-man
−Removed: insurance on the life of, any of our directors or officers.
−Removed: The unexpected loss of the services of one or more of our directors or officers could have a detrimental effect on us.
−Removed: Our ability to successfully effect our initial Business Combination and to be successful thereafter will be dependent upon the efforts of our key personnel, some of whom may join us following our initial Business Combination.
−Removed: The loss of our or a target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: Our ability to successfully effect our initial Business Combination is dependent upon the efforts of our key personnel.
−Removed: The role of our key personnel in the target business, however, cannot presently be ascertained.
−Removed: Although some of our key personnel may remain with the target business in senior management or advisory positions following our initial Business Combination, it is likely that some or all of the management of the target business will remain in place.
−Removed: While we intend to closely scrutinize any individuals we engage after our initial Business Combination, we cannot assure you that our assessment of these individuals will prove to be correct.
−Removed: These individuals may be unfamiliar with the requirements of operating a company regulated by the SEC, which could cause us to have to expend time and resources helping them become familiar with such requirements.
−Removed: In addition, the directors and officers of an acquisition candidate may resign upon completion of our initial Business Combination.
−Removed: The departure of a Business Combination target’s key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: The role of an acquisition candidate’s key personnel upon the completion of our initial Business Combination cannot be ascertained at this time.
−Removed: Although we contemplate that certain members of an acquisition candidate’s management team will remain associated with the acquisition candidate following our initial Business Combination, it is possible that members of the management of an acquisition candidate will not wish to remain in place.
−Removed: The loss of key personnel could negatively impact the operations and profitability of our post-combination business.
−Removed: Our key personnel may negotiate employment or consulting agreements with a target business in connection with a particular Business Combination.
−Removed: These agreements may provide for them to receive compensation following our initial Business Combination and, as a result, may cause them to have conflicts of interest in determining whether a particular Business Combination is the most advantageous.
−Removed: Our key personnel may be able to remain with us after the completion of our initial Business Combination only if they are able to negotiate employment or consulting agreements in connection with the Business Combination.
−Removed: Such negotiations would take place simultaneously with the negotiation of the Business Combination and could provide for such individuals to receive compensation in the form of cash payments and/or our securities for services they would render to us after the completion of our initial Business Combination.
−Removed: The personal and financial interests of such individuals may influence their motivation in identifying and selecting a target business, although he or she will be subject to complying with his or her fiduciary duties under Cayman Islands law.
−Removed: However, we believe the ability of such individuals to remain with us after the completion of our initial Business Combination will not be the determining factor in our decision as to whether or not we will proceed with any potential Business Combination.
−Removed: There is no certainty, however, that any of our key personnel will remain with us after the completion of our initial Business Combination.
−Removed: We cannot assure you that any of our key personnel will remain in senior management or advisory positions with us.
−Removed: The determination as to whether any of our key personnel will remain with us will be made at the time of our initial Business Combination.
−Removed: Our directors and officers will allocate their time to other businesses, including IPOD, IPOF and the Other SCS SPACs, thereby causing conflicts of interest in their determination as to how much time to devote to our affairs.
−Removed: These conflicts of interest could have a negative impact on our ability to complete our initial Business Combination.
−Removed: Our directors and officers are not required to, and will not, commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and our search for a Business Combination and their other businesses.
−Removed: We do not intend to have any full-time employees prior to the completion of our initial Business Combination.
−Removed: Each of our officers is engaged in several other business endeavors for which he may be entitled to, or otherwise expect to receive, substantial compensation or other economic benefit and our officers are not obligated to contribute any specific number of hours per week to our affairs.
−Removed: In particular, all of our officers and certain of our directors have fiduciary and contractual duties to either Social Capital or Suvretta and, as applicable, their underlying clients, and to certain companies in which either of them has invested or are otherwise affiliated with, including IPOD, IPOF and the Other SCS SPACs and companies in industries we may target for our initial Business Combination.
−Removed: For example, Mr.
−Removed: Palihapitiya is the Chief Executive Officer and Chairman of the Board of Directors of IPOD, IPOF and each of the Other SCS SPACs, Mr.
−Removed: Mehta is the President and a director of each of the Other SCS SPACs, and James Ryans, our other officer, is an officer of IPOD, IPOF and each of the Other SCS SPACs, and each of the foregoing owe fiduciary duties under Cayman Islands law to the entities on which he serves as an officer or director.
−Removed: Certain of our independent directors also serve as officers and/or board members for other entities.
−Removed: In addition, IPOD, IPOF and each of the Other SCS SPACs has not yet completed an initial business combination, each of which may require a substantial amount of time, resources and attention from the members of our management team that are affiliated with such entity relating to due diligence, negotiation, structuring and other relevant efforts in connection with an initial business combination.
−Removed: Our officers’ and directors’ other business affairs, including the search or consummation of a business combination for IPOD, IPOF and each of the Other SCS SPACs, as applicable, may require them to devote substantial amounts of time to such affairs.
−Removed: This could limit our officers’ and directors’ ability to devote time to our affairs, which may have a negative impact on our ability to complete our initial business combination.
−Removed: For a discussion of our officers’ and directors’ other business endeavors, please see “Item 10.
−Removed: Directors, Executive Officer and Corporate Governance.”
−Removed: Certain of our directors and officers are now, and expect in the future to become, affiliated with entities engaged in business activities similar to those intended to be conducted by us and, accordingly, may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: Until we consummate our initial Business Combination, we intend to engage in the business of identifying and combining with one or more businesses.
−Removed: Our Sponsor and certain of our directors and officers are affiliated with entities that are engaged in a similar business and in the future also expect to become affiliated with other entities that are engaged in a similar business.
−Removed: For example, Mr.
−Removed: Palihapitiya and Mr.
−Removed: Mehta have founded each of the Other SCS SPACs, each a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting its own initial business combination focused on pursuing an initial business combination with a target operating in the biotechnology industry, and Mr.
−Removed: Palihapitiya, together with Mr.
−Removed: Osborne, founded IPOD and IPOF, each a blank check company incorporated as a Cayman Islands exempted company for the purpose of effecting its own initial Business Combination.
−Removed: Palihapitiya is the Chief Executive Officer and Chairman of the Board of Directors of IPOD, IPOF and each of the Other SCS SPACs, Mr.
−Removed: Mehta is the President and a director of each of the Other SCS SPACs, and James Ryans, our other officer, is an officer of IPOD, IPOF and each of the Other SCS SPACs, and each of the foregoing owe fiduciary duties under Cayman Islands law to the entities on which he serves as an officer or director.
−Removed: Our Sponsor and directors and officers are also not prohibited from sponsoring, investing or otherwise becoming involved with, any other blank check companies, including in connection with their initial Business Combinations, prior to us completing our initial Business Combination, and any such involvement may result in conflicts of interests as described above.
−Removed: Any other special purpose acquisition company may also have terms that are the same or different than our terms, including terms that are more favorable to its investors and/or potential target businesses.
−Removed: Moreover, certain of our directors and officers have time and attention requirements for investment funds of which affiliates of our Sponsor are the investment managers and for IPOD and IPOF and each of the Other SCS SPACs.
−Removed: Our directors and officers also may become aware of business opportunities which may be appropriate for presentation to us and the other entities to which they owe certain fiduciary or contractual duties or otherwise have an interest in, including IPOD, IPOF and the Other SCS SPACs and any other special purpose acquisition company in which they may become involved with.
−Removed: Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should be presented.
−Removed: These conflicts may not be resolved in our favor and a potential target business may be presented to other entities prior to its presentation to us, subject to his or her fiduciary duties under Cayman Islands law.
−Removed: Our amended and restated memorandum and articles of association provide that, to the fullest extent permitted by applicable law:
−Removed: (i) no individual serving as a director or an officer shall have any duty, except and to the extent expressly assumed by contract, to refrain from engaging directly or indirectly in the same or similar business activities or lines of business as us;
−Removed: and (ii) we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any potential transaction or matter which may be a corporate opportunity for any director or officer, on the one hand, and us, on the other.
−Removed: For a discussion of our officers’ and directors’ business affiliations and the potential conflicts of interest that you should be aware of, please see “Item 10.
−Removed: Directors, Executive Officer and Corporate Governance,” “Item 10.
−Removed: Directors, Executive Officer and Corporate Governance — Conflicts of Interest” and “Item 13 — Certain Relationships and Related Party Transactions, and Director Independence.”
−Removed: Our directors, officers, security holders and their respective affiliates may have competitive pecuniary interests that conflict with our interests.
−Removed: We have not adopted a policy that expressly prohibits our directors, officers, security holders or their respective affiliates from having a direct or indirect pecuniary or financial interest in any investment to be acquired or disposed of by us or in any transaction to which we are a party or have an interest.
−Removed: In fact, we may enter into a Business Combination with a target business that is affiliated with our Sponsor, our directors or officers.
−Removed: Nor do we have a policy that expressly prohibits any such persons from engaging for their own account in business activities of the types conducted by us.
−Removed: Accordingly, such persons or entities may have a conflict between their interests and ours.
−Removed: In particular, affiliates of our Sponsor have invested in a diverse set of industries.
−Removed: As a result, there may be substantial overlap between companies that would be a suitable Business Combination for us and companies that would make an attractive target for such other affiliates.
−Removed: Our letter agreements with our initial shareholders, officers and directors may be amended without shareholder approval.
−Removed: Our letter agreements with our initial shareholders, officers and directors contains provisions relating to, among other things, restrictions on transfer of our founder shares and private placement shares, indemnification of the trust account, waiver of redemption rights and participation in liquidating distributions from the trust account.
−Removed: The letter agreements may be amended without shareholder approval.
−Removed: While we do not expect our board of directors to approve any amendment to the letter agreements prior to our initial Business Combination, it may be possible that our board of directors, in exercising its business judgment and subject to its fiduciary duties, chooses to approve one or more amendments to the letter agreements.
−Removed: Any such amendments to the letter agreements would not require approval from our shareholders and may have an adverse effect on the value of an investment in our securities.
−Removed: Risks Relating To Our Securities
−Removed: You will not have any rights or interests in funds from the Trust Account, except under certain limited circumstances.
−Removed: To liquidate your investment, therefore, you may be forced to sell your public shares potentially at a loss.
−Removed: Our public shareholders will be entitled to receive funds from the Trust Account only upon the earliest to occur of:
−Removed: (1) our completion of an initial Business Combination, and then only in connection with those Class A ordinary shares that such shareholder properly elected to redeem, subject to the limitations described herein;
−Removed: (2) the redemption of any public shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles of association (A) to modify the substance or timing of our obligation to allow redemption in connection with our initial Business Combination or to redeem 100% of our public shares if we do not complete our initial Business Combination within 24 months from the closing of the Initial Public Offering or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial
−Removed: Business Combination activity;
−Removed: and (3) the redemption of our public shares if we have not completed an initial Business Combination within 24 months from the closing of the Initial Public Offering, subject to applicable law.
−Removed: In no other circumstances will a shareholder have any right or interest of any kind to or in the Trust Account.
−Removed: Accordingly, to liquidate your investment, you may be forced to sell your public shares, potentially at a loss.
−Removed: Nasdaq may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.
−Removed: We cannot assure you that our securities will continue to be listed on Nasdaq.
−Removed: In order to continue listing our securities on Nasdaq prior to our initial Business Combination, we must maintain certain financial, distribution and share price levels.
−Removed: Generally, we must maintain a minimum number of holders of our securities.
−Removed: Additionally, in connection with our initial Business Combination, we will be required to demonstrate compliance with the applicable exchange’s initial listing requirements, which are more rigorous than continued listing requirements in order to continue to maintain the listing of our securities.
−Removed: We cannot assure you that we will be able to meet those requirements at that time.
−Removed: If any of our securities are delisted from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect such securities could be quoted on an over-the-counter
−Removed: If this were to occur, we could face significant material adverse consequences, including:
−Removed: a limited availability of market quotations for our securities;
−Removed: reduced liquidity for our securities;
−Removed: a determination that our Class A ordinary shares are a “penny stock” which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;
−Removed: a limited amount of news and analyst coverage;
−Removed: a decreased ability to issue additional securities or obtain additional financing in the future.
−Removed: The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or pre-empts
−Removed: the states from regulating the sale of certain securities, which are referred to as “covered securities.” Our Class A ordinary shares currently qualify as covered securities under such statute.
−Removed: Although the states are pre-empted
−Removed: from regulating the sale of covered securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.
−Removed: While we are not aware of a state having used these powers to prohibit or restrict the sale of securities issued by special purpose acquisition companies, certain state securities regulators view blank check companies unfavorably and might use these powers, or threaten to use these powers, to hinder the sale of securities of blank check companies in their states.
−Removed: Further, if we were no longer listed on Nasdaq, our securities would not qualify as covered securities under such statute and we would be subject to regulation in each state in which we offer our securities, which may negatively impact our ability to consummate our initial Business Combination.
−Removed: Because we are incorporated under the laws of the Cayman Islands, you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S.
−Removed: Federal courts may be limited.
−Removed: We are an exempted company incorporated under the laws of the Cayman Islands.
−Removed: As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.
−Removed: Our corporate affairs will be governed by our amended and restated memorandum and articles of association, the Companies Act (as the same may be supplemented or amended from time to time) and the common law of the Cayman Islands.
−Removed: The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands.
−Removed: The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands.
−Removed: The rights of our shareholders and the fiduciary responsibilities of our directors under Cayman Islands law are different from what they would be under statutes or judicial precedent in some jurisdictions in the United States.
−Removed: In particular, the Cayman Islands has a different body of securities laws as compared to the United States, and certain states, such as Delaware, may have more fully developed and judicially interpreted bodies of corporate law.
−Removed: In addition, Cayman Islands companies may not have standing to initiate a shareholder derivative action in a Federal court of the United States.
−Removed: We have been advised by our Cayman Islands legal counsel that the courts of the Cayman Islands are unlikely (1) to recognize or enforce against us judgments of courts of the United States predicated upon the civil liability provisions of the federal securities laws of the United States or any state;
−Removed: and (2) in original actions brought in the Cayman Islands, to impose liabilities against us predicated upon the civil liability provisions of the federal securities laws of the United States or any state, so far as the liabilities imposed by those provisions are penal in nature.
−Removed: In those circumstances, although there is no statutory enforcement in the Cayman Islands of judgments obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met.
−Removed: For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy).
−Removed: A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.
−Removed: As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or controlling shareholders than they would as public shareholders of a United States company.
−Removed: Provisions in our amended and restated memorandum and articles of association may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A ordinary shares and could entrench management.
−Removed: Our amended and restated memorandum and articles of association contain provisions that may discourage unsolicited takeover proposals that shareholders may consider to be in their best interests.
−Removed: These provisions include the ability of our board of directors to designate the terms of and issue new series of preferred shares, which may discourage transactions that otherwise could involve payment of a premium over prevailing market prices for our securities.
−Removed: Since only holders of our founder shares will have the right to vote on the election of directors prior to our initial Business Combination, Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq listing rules and, as a result, we may qualify for exemptions from certain corporate governance requirements that would otherwise provide protection to shareholders of other companies.
−Removed: Only holders of our founder shares will have the right to vote on the election of directors prior to our initial Business Combination.
−Removed: As a result, Nasdaq may consider us to be a “controlled company” within the meaning of the Nasdaq listing rules.
−Removed: Under the Nasdaq corporate governance standards, a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements, subject to applicable phase-in
−Removed: we have a board that includes a majority of “independent directors,” as defined under the Nasdaq listing rules;
−Removed: we have a compensation committee of our board that is comprised entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
−Removed: we have independent director oversight of our director nominations.
−Removed: We do not intend to utilize these exemptions and intend to comply with the corporate governance requirements of Nasdaq, subject to applicable phase-in
−Removed: However, if we determine in the future to utilize some or all of these exemptions, you will not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance requirements.
−Removed: General Risk Factors
−Removed: We have identified a material weakness in our internal control over financial reporting.
−Removed: If we are unable to develop and maintain an effective system of internal control over financial reporting, we may not be able to accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results.
−Removed: The Company has identified a material weakness in its internal controls over financial reporting related to the accounting for our complex financial instruments.
−Removed: In light of the material weakness identified and the resulting restatement, although we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our processes to identify and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements.
−Removed: Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications.
−Removed: The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
−Removed: A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented, or detected and corrected on a timely basis.
−Removed: Effective internal controls are necessary for us to provide reliable financial reports and prevent fraud.
−Removed: We continue to evaluate steps to remediate the material weakness.
−Removed: These remediation measures may be time consuming and costly and there is no assurance that these initiatives will ultimately have the intended effects.
−Removed: A material weaknesses could limit our ability to prevent or detect a misstatement of our accounts or disclosures that could result in a material misstatement of our annual or interim financial statements.
−Removed: In such a case, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to applicable stock exchange listing requirements, investors may lose confidence in our financial reporting, our securities price may decline and we may face litigation as a result.
−Removed: We cannot assure you that the measures we have taken to date, or any measures we may take in the future, will be sufficient to avoid potential future material weaknesses.
−Removed: We may face litigation and other risks as a result of the material weakness in our internal control over financial reporting.
−Removed: As a result of the material weakness described above and other matters raised or that may in the future be raised by the SEC, we face potential for litigation or other disputes which may include, among others, claims invoking the federal and state securities laws, contractual claims or other claims arising from the restatements and material weaknesses in our internal control over financial reporting and the preparation of our financial statements.
−Removed: As of the date of this Annual Report, we have no knowledge of any such litigation or dispute.
−Removed: However, we can provide no assurance that such litigation or dispute will not arise in the future.
−Removed: Any such litigation or dispute, whether successful or not, could have a material adverse effect on our business, results of operations and financial condition or our ability to complete a Business Combination.
−Removed: Our independent registered public accounting firm’s report contains an explanatory paragraph that expresses substantial doubt about our ability to continue as a “going concern.”
−Removed: As of December 31, 2021, we had $440,488 in our operating bank accounts and working capital deficit of $935,119.
−Removed: Until the consummation of a Business Combination, we will be using the funds not held in the Trust Account for identifying and evaluating prospective acquisition candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to acquire, and structuring, negotiating and consummating the Business Combination.
−Removed: We may need to raise additional capital through loans or additional investments from our Sponsor, shareholders, officers, directors, or third parties.
−Removed: Our officers, directors and Sponsor may, but are not obligated to, loan us funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion, to meet our working capital needs.
−Removed: Accordingly, we may not be able to obtain additional financing.
−Removed: If we are unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses.
−Removed: We cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
−Removed: These conditions raise substantial doubt about our ability to continue as a going concern for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements.
−Removed: The financial statements contained elsewhere in this Annual Report do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should we be unable to continue as a going concern.
−Removed: We are a newly incorporated company with no operating history and no operating revenues, and you have no basis on which to evaluate our ability to achieve our business objective.
−Removed: We are a newly incorporated company incorporated under the laws of the Cayman Islands with no operating results.
−Removed: Because we lack an operating history, you have no basis upon which to evaluate our ability to achieve our business objective of completing our initial Business Combination with one or more target businesses.
−Removed: We have no plans, arrangements or understandings with any prospective target business concerning a Business Combination and may be unable to complete our initial Business Combination.
−Removed: If we fail to complete our initial Business Combination, we will never generate any operating revenues.
−Removed: Past performance by our management team and their respective affiliates may not be indicative of future performance of an investment in the company.
−Removed: Past performance by our management team and their respective affiliates, including IPOA, IPOB, IPOC, IPOD, IPOE, IPOF, the Other SCS SPACs, Social Capital and Suvretta, is not a guarantee either (1) that we will be able to identify a suitable candidate for our initial Business Combination or (2) of success with respect to any Business Combination we may consummate.
−Removed: You should not rely on the historical record of our management team or their affiliates, including IPOA, IPOB, IPOC, IPOD, IPOE, IPOF, the Other SCS SPACs, Social Capital and Suvretta, or any related investment’s performance as indicative of our future performance of an investment in us or the returns we will, or is likely to, generate going forward.
−Removed: Cyber incidents or attacks directed at us could result in information theft, data corruption, operation disruption and/or financial loss.
−Removed: We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
−Removed: Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data.
−Removed: As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
−Removed: We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
−Removed: It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
−Removed: We may be a passive foreign investment company, or “PFIC,” which could result in adverse U.S.
−Removed: federal income tax consequences to U.S.
−Removed: If we are a PFIC for any taxable year (or portion thereof) that is included in the holding period of a beneficial owner of our ordinary shares who or that is, for U.S.
−Removed: federal income tax purposes (i) an individual citizen or resident of the United States, (ii) a corporation (or other entity or arrangement that is treated as a corporation for U.S.
−Removed: federal income tax purposes) that is created or organized in or under the laws of the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is subject to U.S.
−Removed: federal income tax regardless of its source, or (iv) a trust if (A) a U.S.
−Removed: court can exercise primary supervision over the administration of such trust and one or more U.S.
−Removed: persons have the authority to control all substantial decisions of the trust or (B) it has a valid election in place to be treated as a U.S.
−Removed: person (a “U.S.
−Removed: Holder”), such U.S.
−Removed: Holder may be subject to adverse U.S.
−Removed: federal income tax consequences and may be subject to additional reporting requirements.
−Removed: Our PFIC status for our current and subsequent taxable years may depend upon whether we qualify for the PFIC start -up exception.
−Removed: Depending on the particular circumstances, the application of the start-up exception may be subject to uncertainty, and there cannot be any assurance that we will qualify for the start-up exception.
−Removed: Accordingly, there can be no assurances with respect to our status as a PFIC for our current taxable year, or any subsequent taxable year.
−Removed: Our actual PFIC status for any taxable year, moreover, will not be determinable until after the end of such taxable year.
−Removed: If we determine we are a PFIC for any taxable year, we will endeavor to provide to a U.S.
−Removed: Holder such information as the Internal Revenue Service (“IRS”) may require, including a PFIC Annual Information Statement, upon request, in order to enable the U.S.
−Removed: Holder to make and maintain a “qualified electing fund” election, but there can be no assurance that we will timely provide such required information.
−Removed: Holders to consult their own tax advisors regarding the possible application of the PFIC rules to holders of our ordinary shares.
−Removed: We are an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies.
−Removed: We are an “emerging growth company” within the meaning of the Securities Act, as modified by the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.
−Removed: As a result, our shareholders may not have access to certain information they may deem important.
−Removed: We could be an emerging growth company for up to five years, although circumstances could cause us to lose that status earlier, including if the market value of our ordinary shares held by non-affiliates
−Removed: equals or exceeds $700 million as of the end of any second quarter of a fiscal year, in which case we would no longer be an emerging growth company as of the end of such fiscal year.
−Removed: We cannot predict whether investors will find our securities less attractive because we will rely on these exemptions.
−Removed: If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and the trading prices of our securities may be more volatile.
−Removed: Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.
−Removed: The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging
−Removed: growth companies but any such election to opt out is irrevocable.
−Removed: We have elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
−Removed: This may make comparison of our financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
−Removed: Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation S-K.
−Removed: Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements.
−Removed: We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by non-affiliates
−Removed: equals or exceeds $250 million as of the end of that year’s second fiscal quarter, and (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year or the market value of our ordinary shares held by non-affiliates
−Removed: equals or exceeds $700 million as of the end of that year’s second fiscal quarter.
−Removed: To the extent we take advantage of such reduced disclosure obligations, it may also make comparison of our financial statements with other public companies difficult or impossible.
−Removed: Cyber incidents or attacks directed at us could result in information theft, data corruption, operation disruption and/or financial loss.
−Removed: We depend on digital technologies, including information systems, infrastructure and cloud applications and services, including those of third parties with which we may deal.
−Removed: Sophisticated and deliberate attacks on, or security breaches in, our systems or infrastructure, or the systems or infrastructure of third parties or the cloud, could lead to corruption or misappropriation of our assets, proprietary information and sensitive or confidential data.
−Removed: As an early stage company without significant investments in data security protection, we may not be sufficiently protected against such occurrences.
−Removed: We may not have sufficient resources to adequately protect against, or to investigate and remediate any vulnerability to, cyber incidents.
−Removed: It is possible that any of these occurrences, or a combination of them, could have adverse consequences on our business and lead to financial loss.
−Removed: Unresolved Staff Comments.
−Removed: We currently maintain our executive offices at 2850 W.
−Removed: Horizon Ridge Parkway, Suite 200, Henderson, NV 89052.
−Removed: The cost for this space is included in the $10,000 per month fee that we will pay an affiliate of our Sponsor for office space, administrative and support services.
−Removed: We consider our current office space adequate for our current operations.
+Added: As of December 31, 2022, ProKidney had 87 full-time employees.
+Added: This included 31 in research and development, 43 in manufacturing, operations, quality control and quality assurance, and 13 in general and administrative functions.
+Added: We have no collective bargaining agreements with our employees, and we have not experienced any work stoppages.
+Added: We consider our relations with our employees to be good.
+Added: Information Available on the Internet
+Added: Our internet address is https://www.prokidney.com, to which we regularly post copies of our press releases as well as additional information about us.
+Added: This Annual Report on Form 10-K and our quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports, are available to you free of charge through the Investors section of our website as soon as reasonably practicable after such materials have been electronically filed with, or furnished to, the SEC.
+Added: The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
+Added: We include our web site address in this Annual Report only as an inactive textual reference.
+Added: Information contained in our website does not constitute a part of this report or our other filings with the SEC.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.